US buyout firm TA Associates is backing the £740 million (€1.09 billion; $1.45 billion) buyout of UK-based Jupiter Asset Management, taking an unspecified stake alongside the company’s management.
Jupiter did not specify the size of TA’s equity stake, but chief executive Edward Bonham-Carter seemed to suggest that management is taking a more substantial equity stake than is usually found in private equity-backed buyouts. The senior management team would commit “significant personal assets to take joint ownership of the business with TA,” he said in a statement, with the asset manager’s employees also participating in the equity.
Reports have suggested that management will take a stake of about 60 percent, and will occupy six of the nine board seats.
The buyout brings to an end a long-running sale process for Jupiter, which Commerzbank has been looking to exit since last summer. The German bank initially planned to float the UK-based asset manager, but the management team – led by Bonham-Carter – preferred to keep the company private.
It subsequently conducted talks with a number of potential backers before TA Associates emerged as the favoured partner. UK buyout firm Candover was widely regarded as the favourite, until it pulled out of the process earlier this month after disagreeing with the management team over its valuation of the business.
TA has now made ten investments in the asset management sector. Ajit Nedungadi, head of the firm’s London office, said: “Jupiter is a powerful brand in the UK fund management industry driven by an impressive record of investment performance and growth. The investment fits very well with TA’s focus on growth businesses in targeted industries in the UK and on the continent.”
Jupiter, which was founded by John Duffield in 1985, has about 19.2 billion pounds of assets under management and employs about 450 people. Commerzbank first bought a 75 percent stake in the asset manager for £175 million in 1995, before buying the remaining 25 percent for £500 million in 2000.