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Martin Currie To Build Hedge Fund Business With Acquisition

Harriet Davies 3 June 2010

Martin Currie To Build Hedge Fund Business With Acquisition

Investment management firm Martin Currie is building out its hedge fund business and has agreed to acquire the Sofaer Capital European long/short equities business.

The deal will see $280 million in assets under management transfer to Martin Currie, effective 1 July if all goes as expected. The assets are split between $140 million in the Sofaer Capital European Hedge Fund and $140 million in two separate accounts.

Terms of the deal were not disclosed.

The two fund managers responsible for this fund, Michael Browne and Steve Frost, are also expected to join Martin Currie on 1 July, while Charlotte Dagg, the investment analyst working on the fund, is expected to join later in the year.

The Sofaer Capital European Hedge Fund was launched in 1998, with Frost and Browne joining the firm to take over the management of it in 2000. The divestment of it to Martin Currie is part of a plan by Sofaer – which was founded in Hong Kong in 1986 – to reduce its presence in the UK, and return to its traditional focus on Asian equities, as well as natural resource- and global-focused funds.

Sofaer Capital currently manages around $600 million and has Asian, European and global investment teams working predominantly from its London and Hong Kong offices; however, following the handover, all of its funds will be managed from Hong Kong, while it will continue to have a research capability in the UK.

Meanwhile, at Martin Currie, the proposed acquisition comes at a time of recent expansion, as in May it added to its staff base including its Asian equities, global emerging markets and US sales teams. At the end of last year the firm reported funds under management of £11.8 billion (around $17.2 billion), up from £9.9 billion at the end of the prior year, and an operating profit of £22.9 million, which was down from £33.8 billion in 2009.

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