Dallas, Texas 11/27/2013 (Financialstrend) – The $1.61 billion market capped private equity firm Carlyle Group LP (NASDAQ:CG) has announced that it is all set to expand its operations in the hedge fund business by the acquisition of Toronto based hedge fund advisory firm Diversified Global Asset Management Corp. The owners of Diversified will get paid $30 million up front and will be eligible to draw an additional $70 million on certain predefined mile stone achievements with respect to its returns. The funds for the buyout are being sourced through the company’s cash on hand.
Carlyle Strong Push Into The Hedge Funds Space
Commenting about the importance of this acquisition, Carlyle Solutions division recently hired head Jacques Chappuis (into who’s group the acquired firm will roll into post the completion of formalities) has been quoted as saying, “Increasingly, investors don’t want to be approached with products, they want help from an organization to think through the different options available to them, including hedge funds, private equity and other kinds of investments.” The “Solutions” division of Carlyle Group LP (NASDAQ:CG) boasted of managing assets worth $48.4 billion before the current merger. Readers should note that Carlyle had headhunted Jacques from his previous employer Morgan Stanley where he was heading its hedge funds business in order to specifically grow its hedge firm arm.
Carlyle Taking The Inorganic Route To Diversify
This acquisition is being seen as part of continued efforts of the “private equity” major firm to diversify its scope of operations. Readers should note that in 2011, Carlyle Group LP (NASDAQ:CG) had acquired investor advisory firm AlpInvest Partners to expand its wealth management and investment advisory business. More recently, at the beginning of this month, the firm had also acquired Metropolitan Real Estate Equity Management LLC to augment its real estate investment and advisory arm.