In an effort to expand its alternative investment
capabilities, Principal Global Investors, LLC, the investment arm
Principal Financial Group Inc
), agreed to purchase 55% shares of Liongate Capital Management
(Liongate) for an undisclosed amount.
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Founded in 2003, Liongate Capital Management manages hedge fund
portfolios with operations in London and New York. Currently,
Liongate supervises $2.1 billion assets under management with
customers including leading pension funds, insurance companies
and sovereign wealth funds.
The transaction is expected to culminate in the second quarter of
2013 and will be slightly accretive to earnings from the first
year itself. Liongate partners will retain 45% stake and deploy a
considerable portion from the sale proceeds in investment
The addition of Liongate to the company's portfolio will fortify
its alternative investment competence as well as help it widen
its reach in the multi-asset and hedge fund solutions.
On the other hand, Liongate will gain from Principal Financial's
international exposure, new as well as existing product
portfolios and solid distribution networks.
Earlier in 2011, the company acquired the majority stake in
Finisterre Capital LLP and Finisterre Holdings Limited, an
emerging markets debt investor based in London. Furthermore,
Principal Financial is consistently undertaking strategic
acquisitions. Recently, it initiated a bid to acquire AFP Cuprum
S.A. for $1.39 billion. Chile-based AFP Cuprum is a leading
pension manager with about $32.7 billion of assets under
Principal Financial currently carries a Zacks Rank #3 (Hold).
None of the estimates were revised following its fourth-quarter
earnings release. With optimism over the current acquisition, we
expect analysts to raise their estimates, putting upward
directional pressure on the Zacks Rank.
Other multi-line insurers like
CNO Financial Group Inc
Assured Guaranty Ltd.
), carry a Zacks Rank #1 (Strong Buy) and are worth noting.