KKR Expands into HFs with Marshall Wace

The private equity giant has agreed to buy a 25% stake in the London-based hedge fund, upping its presence in liquid alternatives. 

KKR is making aggressive moves into the hedge fund space.

The private equity giant, with more than $100 billion in assets under management, will take a 25% stake in Marshall Wace, with the option to grow its ownership to nearly 40%.

“We believe Marshall Wace has built a premier franchise within the liquid alternatives space, and the firm has an entrepreneurial DNA and a culture that is similar to KKR’s,” said Scott Nuttall, KKR’s head of global capital and asset management.

KKR added that the “long-term strategic partnership” would help “significantly scale” its hedge fund offerings.

“We believe Marshall Wace has built a premier franchise within the liquid alternatives space, and the firm has an entrepreneurial DNA and a culture that is similar to KKR’s.”Specifically, the private equity firm said it saw opportunities in the growing liquid alternatives market by combining KKR and Marshall Wace’s “investment acumen, distribution network, and geographic footprints.”

“Over the last few years, we have been approached by several firms looking to invest in our business, but KKR offered something different: a true, long-term partnership,” Ian Wace, Marshall Wace’s chief executive, said.

When the transaction closes, the hedge fund said its investment strategies and core operations would not change. Its management team will also continue running the business independently.

Marshall Wace, with $22 billion in assets as of August 1, predominantly runs equity long/short strategies and boasts a 17-year track record.

KKR is the latest private equity giant to acquire stakes in hedge funds.

In May, Blackstone bought a minority stake in $13.6 billion Magnetar Capital. The firm also purchased stakes in Senator Investment Group and Solus Alternative Asset Management.

Washington DC-based Carlyle Group also acquired a 55% stake in Claren Road Asset Management in 2010. 

KKR and Marshall Wace’s deal is expected to close later this year, subject to regulatory approvals.

Related: From All Sides, Pressure Mounts Over Private Equity Fee Practices

By Sage Um

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