Principal to acquire majority stake in hedge fund firm

Principal Global Investors is set to acquire a majority stake in Liongate Capital Management, a global alternative investment boutique managing portfolios of hedge funds.

The deal will see Principal take a 55% stake, while the Liongate partners will retain 45%, with the transaction expected to close in the second quarter.

Liongate has around $2.1 billion in assets under management and is based in London and New York, with clients spanning sovereign wealth funds and global pension funds.

‘With its strong reputation and focused investment expertise, Liongate is a welcome addition to our multi-boutique investment management structure,’ said Jim McCaughan, chief executive officer of Principal Global Investors.

‘The partnership will enhance our capabilities in alternative investments, which is an area where client demand continues to grow. Very few institutional investment firms have this level of expertise in hedge fund investing.’

Through the arrangement Liongate can benefit from access to Principal’s global footprint and distribution networks.

‘Our clients increasingly want hedged solutions over their entire portfolios, and not just on an ‘alternatives’ side plate,’ said Randall Dillard, chief investment officer and co-founder of Liongate.

‘The operational synergies and economies of scale will enhance our client resources globally, enabling Liongate to focus on consistent, risk-adjusted client performance.’