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Hamilton Lane Gets on Hedge Fund Bandwagon

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NEW YORK (–Following a well-established trend of hedge fund mergers and acquisitions, private equity manager Hamilton Lane of Bala Cynwyd, Penn., agreed to buy a controlling stake in New York-based Richcourt Group, a fund of funds firm. The transaction should be completed in 15 days.

Richcourt, managing more than US$1.5 billion in hedge fund assets, is a wholly owned subsidiary of Citco Group Ltd., the parent company of hedge fund administrator Citco Fund Services. Citco is to retain significant ownership in Richcourt and continue to have representation on its investment committee.

According to the announcement, there is no plan to integrate the private equity and hedge fund operations, but Hamilton Lane’s John Mensack will become chief executive of Richcourt. Mr. Mensack has hedge fund experience from a previous job (see ).

The transaction makes strategic sense for both businesses, according to Hamilton Lane Vice Chairman Hartley Rogers. It “reflects the accelerating convergence of the private equity and hedge fund businesses and will enable us to serve better the respective institutional and individual clients of both firms,” he said, in a statement.

Hamilton Lane Chief Executive Mario Giannini said a growing number of institutional clients want to increase their exposure to hedge funds. “By bringing Richcourt into the Hamilton Lane family, we and our clients gain direct and seamless access to Richcourt’s hedge fund advisory team, skill sets, hedge fund manager relationships and tailored product capabilities,” he said, in a statement.

Hedge fund-related M&A activity became noticeable several years ago. UBS AG bought GAM in 1999, Bank of New York bought Ivy Asset Management in 2000, and MassMutual Financial Group’s Oppenheimer unit bought Tremont Advisers Inc.*, now Tremont Capital Management Inc., in 2001.

This year J.P. Morgan Chase acquired Highbridge Capital Management. Some businesses buy individual funds from other firms–Kenmar Group of Companies recently acquired funds from Prudential Securities (see ).

Hamilton Lane has more than US$34 billion of assets under management, of which US$5 billion is discretionary.

*Tremont Capital Management Inc., Rye, N.Y., is a strategic partner of and a minority investor in HedgeWorld.

Contact Bob Keane with questions or comments at: [email protected].