Hedge Funds Active in M&A

One of the few bright spots in the M&A world so far this year, is dealing by hedge funds. Sales of alternative investment firms account for a record 40 percent of deals in the global investment management business thus far in 2008, according to Jefferies Putnam Lovell, a leading adviser on alternative investment transactions focused on the asset management and financial technology industries.

Through April 2008, 29 of the 73 transactions announced involve alternative investment firms, according to New York-based Jefferies Putnam Lovell. The total includes 20 transactions of hedge fund and fund of hedge fund (FoHF) managers. Deal flow in 2007 involving alternative investment firms represented 32% of the 241 total transactions in the global asset management industry.

‘’We expect record demand for alternative asset managers to continue throughout 2008, motivated by buyers’ search for absolute returns and innovative products in challenging capital markets,’’ said Aaron H. Dorr, a New York-based Managing Director at Jefferies Putnam Lovell.

Jefferies Putnam Lovell has been involved as financial adviser in several of this year’s most significant transactions involving firms in the alternatives sector, including:

• This week’s announced sale of an interest in Stamford, CT-based Aladdin Capital Management, which focuses on non-traditional fixed income strategies, to Japan’s Mitsubishi Corp.
  
  
• The announced reverse merger between global multi-strategy investment firm Halcyon Asset Management and Alternative Asset Management Acquisition Corp., a publicly traded SPAC. March 2008.
  
  
• The sale of an interest in Hong Kong-based alternative investment specialist Vision Investment Management to Turin-based investment company IFIL. February 2008.
  
• The sale of Carlsbad, CA-based hedge fund administrator HedgeWorks to Deutsche Bank. January 2008.