A group consisting of hedge funds JC Flowers & Co. and Friedman Fleischer & Lowe, agreed late last night to buy SLM Corp also known as or Sallie Mae, the US's largest provider of student loans, in a $25 billion deal. Also in on the deal is J.P. Morgan Chase & Co. and the Bank of America.
The idea driving the deal revolves around using financial engineering and more-efficient management to improve Sallie Mae's balance sheet. The two New York-based hedge fund firms will control 50.2% of the company, while the banks will own the rest.
Under the terms of the deal, they said, the buyers will pay $60 a share in cash, which represents almost a ५०% premium over Sallie Mae’s battered share price before news of a potential buyout was reported in The New York Times last week. The share price has surged nearly 15% on the prospect that the company could be bought out.
JC Flowers & Co is one of the largest investment funds focused solely on the financial service sector. The fund has over $900 million in commitments from financial and strategic investors. Investors in the hedge fund include ABN Amro, AIG, Banco Santander, GE, Goldman Sachs, JP Morgan Chase among others.
Friedman Fleischer & Lowe focuses on investing in middle-market companies and currently has over $1 billion in assets under management.
16 Apr 2007
London Doubles its Share of Global Hedge Fund Assets
London's share of global hedge fund assets increased from 10% to 21% between 2002 and 2006, making London one of the fastest growing hedge fund centres according to the 2007 edition of IFSL's Hedge Funds report. Assets managed by hedge fund managers based in London totaled around $360bn in 2006, up 40% on the previous year, and a six-fold increase from 2002.
New York remained the leading global location for hedge fund managers in 2006 with 36% of global assets. Its share was down however, from 45% in 2002 as growth of the hedge fund industry in Europe and Asia outpaced growth in the US. This was largely a result of a rise in institutional portfolio allocation into hedge funds in these regions during this period.
London is by far the largest center for European hedge fund managers. The 900 hedge funds located in London accounted for four-fifths of European based hedge fund assets in 2006. If figures for fund of funds and US hedge funds with a trading desk in Europe are taken into account, London's share was more than 90%. Other locations for hedge fund managers in Europe include France, Spain, Sweden and Switzerland.
Factors underpinning London's strong position include its local expertise, the proximity of clients and markets, a strong asset management industry and a favorable regulatory environment. London is also a leading center for hedge fund services notably prime brokerage services offered by the leading London based investment banks. More than 90% of European prime brokerage activity is conducted through London.
New York remained the leading global location for hedge fund managers in 2006 with 36% of global assets. Its share was down however, from 45% in 2002 as growth of the hedge fund industry in Europe and Asia outpaced growth in the US. This was largely a result of a rise in institutional portfolio allocation into hedge funds in these regions during this period.
London is by far the largest center for European hedge fund managers. The 900 hedge funds located in London accounted for four-fifths of European based hedge fund assets in 2006. If figures for fund of funds and US hedge funds with a trading desk in Europe are taken into account, London's share was more than 90%. Other locations for hedge fund managers in Europe include France, Spain, Sweden and Switzerland.
Factors underpinning London's strong position include its local expertise, the proximity of clients and markets, a strong asset management industry and a favorable regulatory environment. London is also a leading center for hedge fund services notably prime brokerage services offered by the leading London based investment banks. More than 90% of European prime brokerage activity is conducted through London.
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