Hedge Fund Operator Acquired For $1.32 Billion

In a deal worth up to $1.32 billion, London hedge fund operator Marble Bar Asset Management LLP has been bought by Swiss private banking group EFG International.

EFG said it will initially pay $517 million in cash, plus a further $300 million to $800 million over the next six years, depending on the performance of Marble Bar's funds. Of the initial cash payment to Marble Bar partners and staff, about $400 million will be reinvested in Marble Bar funds for up to six years.

In a press release yesterday, EFG said that the purchase broadens its capabilities in hedge funds and brings the hedge fund-related assets it manages to around $13.3 billion , or 18% of clients funds. Last year, EFG bought fund of hedge funds manager C.M. Advisors for an undisclosed amount.

According to Hedge Fund Research Inc., investors have poured $164 billion into hedge funds in the first nine months of 2007, boosting global assets to $1.8 trillion.

Chief Executive of EFG, Lonnie Howell, said buying Marble Bar gives the bank access to "sheer talent" and will help it meet demand from wealthy individuals for hedge fund investments.

Marble Bar's 2008 net profit is expected be at least $80 million to $100 million EFG said, meaning the purchase price is about 10 times estimated earnings.