The Des Moines, Iowa-based company today announced an agreement to purchase a 55% stake in global alternatives boutique Liongate Capital Management, which is based in London and New York and manages portfolios of hedge funds.
Liongate manages approximately U.S. $2.1 billion in assets in commingled funds and dedicated client portfolios. Clients include pension funds, insurance companies and sovereign wealth funds.
"Liongate is a welcome addition to our multi-boutique investment management structure," saidJim McCaughan, chief executive officer of Principal, said in a press release. "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."
Liongate partners will retain a 45% share of the company and will retain their current roles.
The transaction is expected to close in the second quarter, pending pending regulatory approval. Principal estimates the acquisition will be slightly accretive in the first year.
Sandler O'Neill + Partners advised Principal on the transaction, and Fenchurch Advisory Partners advised Liongate.