US buyout firm TA Associates, which recently won the race to back a management buyout at UK-based Jupiter Asset Management, has made its first move into the fund of hedge fund business by taking a minority stake in US group K2 Advisors.
Stamford-based K2, which manages a $5.5 billion fund, will retain full operating authority and control of the company. The firm said it will invest about $100 million of the proceeds in existing K2 strategies and new projects, while broadening its equity ownership to a greater number of its employees and management.
Financial details of the transaction were not disclosed.
TA managing director Roger B. Kafker, who will join K2’s board of directors, said his firm had been looking to make an acquisition in the sector for some time. “K2 Advisors is the type of profitable growth company in which TA seeks to invest. They are a recognized pioneer in portfolio transparency and risk analytics, and their investment process and role as trusted advisor to their clients is unique in the fund of hedge funds industry.”
K2 co-founder William Douglass said: “We see a significant number of synergies with TA Associates and its limited partners and look forward to working closely with them. We also see opportunities to selectively expand our franchise and this investment will enable us to actively explore those opportunities.”
TA Associates has more than $10 billion of capital under management, and owns stakes in nearly 400 companies.
Freeman & Co advised K2 on the sale to TA.