FLAG Capital Management, a US private capital investment manager, has acquired Squadron Capital, a Hong Kong-based private equity investment firm, as the latest example of M&A in the Asian wealth management sector. 

FLAG bought the US$1.5 billion Hong Kong firm from parent Search Investment Group, the private investment company of the wealthy Robert Miller family. The deal is expected to close on or before end December 2012 and terms were not disclosed.

The transaction increases FLAG's total AUM to over US$6 billion and allows it to more effectively deliver global solutions in private equity, venture capital, natural resources and real estate, it said in a statement. The structure of the deal, which integrates Squadron Capital's team into FLAG, will ensure the continuity of management of the two firms' extensive investments in the region. David Pierce, chief executive officer of Squadron Capital, will become a FLAG Partner.

Robert Miller, chairman of Search Investment Group, said: "I am delighted that we have reached a mutually beneficial agreement with FLAG for the purchase of Squadron, and can think of no better home for this business." He added that Search Investment Group will continue to be a significant investor in the firm's Asia private equity offerings and will enlist FLAG in the management of the group's significant global private equity investment portfolio.

FLAG and Squadron Capital's client base includes private and public retirement plans, foundations, endowments and family offices. FLAG has been in existence for 18 years and has US$4.7 billion in assets.

Squadron Capital was set up in 2006 and constructs and manages portfolios of private equity funds and direct investments in Asia. The firm manages capital for institutional investors, family offices and high net worth individuals from Asia, Europe, the Middle East and North America.

There have been a number of high profile M&A deals done in recent months all over Asia, including those initiated by HSBC selling many businesses in the regions in which it lacks scale, for example in India, Japan, Thailand and South Korea, to various parties. Dutch group ING also sold its Thai and Malaysian insurance business this month to business tycoon Richard Li, while Singapore's DBS divested half of its stake in Bank of Philippine Islands to Ayala Corporation. In Australia, alternative asset manager CCP BidCo acquired Sydney wealth manager ClearView Wealth, last month.