GENERAL Atlantic agreed to buy a stake in Partners Capital, a US$50 billion asset manager that focuses on outsourcing investments for institutions including family offices, foundations and endowments.
The private equity firm is buying a minority interest from existing investors including entities tied to Jacob Rothschild and Ronald Cohen, a co-founder of Apax Partners, who are both staying on as shareholders, Partners Capital chief executive officer Arjun Raghavan said in an interview.
Founding executives of the firm will also be selling equity, though no one is unloading their stakes entirely, he said.
Partners Capital will operate independently from General Atlantic, which is making the investment through its core growth equity funds.
The move will “provide meaningful incentives to lock in talent for the next generation,” Raghavan said. “I don’t mean just for the next few years, but also to provide incentives for future talent coming through.”
General Atlantic, with about US$83 billion of assets under management, is known for successful early investments in tech firms such as Facebook and Uber Technologies. It has branched out to other areas including wealth management and financial services, acquiring stakes in Creative Planning, Santander Asset Management and Brazilian broker-dealer XP Investimentos.
“It’s really a down-the-fairway, typical, exciting deal for General Atlantic,” said Gabriel Caillaux, who oversees the firm’s business in Europe, the Middle East and Africa. “For us, this another claim to wealth management.”
Raghavan, 48, sees General Atlantic bringing expertise in technology as well as access to an even more global investor base. While his firm’s clients already have investments with General Atlantic, Partners Capital will not be routing new money to the private equity firm.
“We were very, very keen to make sure there was no conflict between what we offered our clients as an investment,” Raghavan said. “We wanted to find a great financial partner.” BLOOMBERG
