India financial services group Religare Enterprises has acquired a majority stake in US and UK-based fund of funds investor Northgate Capital. Reportedly valued at $36m, the deal is the opening salvo in a $1bn spending programme Religare is planning that will see the group invest in asset management firms across the globe.
The transaction, which Religare says will not lead to any changes to Northgate’s management team or investment processes, is expected to close in the first half of 2010. Northgate’s five partners are to continue to retain controlling interests in Northgate’s GP entities, and will maintain an equity stake in the management company.
“This partnership will accelerate our process of seeking similar partnerships in other asset classes, including both alternatives and traditional in developed and emerging markets,” said Religare CEO and managing director Sunil Godhwani.
The acquisition is the first of an extended campaign of asset manager investments for Religare. The firm has announced plans to invest in firms from around the world operating within a variety of asset classes and investment disciplines. Religare says that it will provide strategic support and capital to help facilitate responsible growth of affiliated firms, while leaving existing investment professionals in charge of day-to-day operations and investment decisions.
Dr Hosein Khajeh-Hoseeiny, partner and head of global private equity at Northgate, said, “Religare will uniquely strengthen our industrial and capital markets insights and solidify our presence, access, and investment due diligence in the emerging markets, especially Asia.”
Northgate makes private equity and venture capital fund investments, as well as direct venture capital co-investments in disruptive companies in the energy, greentech, life sciences and IT sectors. Recent investments have included mobile advertising network AdMob, iris recognition system and ultra-high bandwidth wireless optical communication solutions company AOptix Technologies, and printed silicon electronics company Kovio.
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