FRANKFURT, Germany (HedgeWorld.com)–Commerzbank AG dropped plans to sell its U.K. investment unit Jupiter International Group, London, but is going ahead with plans to sell Montgomery Asset Management LLC, San Francisco.
Commerzbank officials decided to keep and build Jupiter rather than sell it at a price below its full value, according to a company statement. The company had been negotiating to sell the firm. Instead, Commerzbank will work with Jupiter’s management to realize full value of the company, which will include using Commerzbank’s distribution networks in Europe to sell its products, according to Commerzbank.
But negotiations to sell Montgomery to one of “several interested parties” continue, and a sale should be finished in the fourth quarter of this year, according to the statement. Montgomery manages about US$7.5 billion in total and is working to build a hedge fund business targeting retail type of investors.
Jupiter has seen mixed success since the departure of its founder, John Duffield, who formed New Star Asset Management, which has experienced swift asset growth through both hedge funds and traditional management. Previous HedgeWorld Story.
On the hedge fund side, Jupiter recently shuttered one of its hedge funds–the Carmi Hedge Fund Ltd.–after falling short of its goals for absolute performance and volatility. “By no means did it do disastrously,” but the fund wasn’t performing well enough to begin selling it to outside investors, said Kevin Meehan head of operations of Jupiter’s hedge fund advisory group. Jupiter’s two other hedge funds, the US$125 million Hyde Park Hedge Fund and the US$17 million Europa Hedge Fund Ltd., have performed well this year, he said. Jupiter’s US$20 million Fund of Hedge Funds also is doing well, he added.
Closing the Carme fund frees up Jupiter cash to incubate additional strategy, something the firm plans on doing, Mr. Meehan said. Justin Seager, manager of Europa, still manages a long-only fund for Jupiter, something he did while managing the hedge fund. Previous HedgeWorld Story Jupiter manages US$165 million in hedge funds and US$17 billion overall.