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Portfolio > Alternative Investments > Private Equity

Private Equity Firm Lovell Minnick Is Buying $20B Tortoise Investments

By Bernice Napach

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Private equity firm Lovell Minnick Partners has signed a definitive agreement to purchase Tortoise Investments, a $20.2 billion asset management firm that specializes in the energy sector, including MLPs. It manages closed-end funds, mutual funds and separately managed accounts.

Terms were not disclosed, and the deal is expected to close in the first quarter of 2018.

Lovell Minnick will be purchasing the equity stake in Tortoise currently owned by Mariner Holdings and the retiring co-founders of Tortoise. Three co-founders, Zachary Hamel, Kenneth Malvey and Terry Matlack, will sell their interest in Tortoise and then retire from the firm when the deal closes; another co-founder, David Schulte, who left Tortoise in 2015, will also sell his remaining interest in Tortoise.

Other members of Tortoise’s senior management and its portfolio managers have signed long-term employment agreements to remain with the firm, which will maintain its independence and brand and daily portfolio management.

“This partnership will deepen our financial flexibility to facilitate strategic growth, which will also provide opportunities to develop and retain employees,” said Tortoise CEO and co-founder Kevin Birzer in a statement.

Bob Belke, a partner at Lovell Minnick, echoed the sentiment, noting the Lovell Minnick looks forward to “providing Tortoise with strategic and capital support to help further enhance and expand its client solutions.”

Joining Lovell Minnick in the deal were private equity firms HarbourVest Partners and AlpInvest Partners along with several additional limited partners.

Private equity funds have been increasing their acquisitions and minority stakes in the asset management industry, but acquisitions, which were brisk in the first quarter and included SoftBank’s $3.3 billion acquisition of Fortress Investment Group, slowed in the second, according to PwC, which hasn’t released its third-quarter report yet. Private equity purchases of minority stakes, however, continued to be strong in Q2.

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