Acquisition

21st Feb 2006 07:03

Schroders PLC21 February 2006 Stock Exchange Release Schroders to acquire NewFinance Capital, a London-based Funds of Hedge FundsManager Tuesday 21 February 2006 Schroders plc ("Schroders") announces that it has reached agreement to acquire100 per cent. of the share capital of NewFinance Capital, a London-based managerof funds of hedge funds. At 31 December 2005, NewFinance Capital had assetsunder management of approximately $2.5 billion with net revenues ofapproximately $20 million in 2005. The consideration will be $101 million withup to a further $41 million contingent on certain revenue targets being met, tobe paid over a four year period. Founded in 2002, NewFinance Capital has developed rapidly under a highlyexperienced management team, comprising Marc Hotimsky, Georges Saier andThorkild Juncker, with institutional-quality investment processes and a focusedproduct range in the multi-strategy and fixed income areas and more recently incredit, commodities and equities. NewFinance Capital's clients include UK,European, Middle Eastern and Japanese institutions, distributors and high networth investors. NewFinance Capital has a staff of 28 and is based in London,with a research office in New York. Schroders and NewFinance Capital have agreed to combine their funds of hedgefunds activities under NewFinance Capital's management to create a global fundsof hedge funds business with $3.2 billion of assets under management. NewFinanceCapital will become a wholly-owned subsidiary of Schroders operating as aseparate company within the Schroder Group. The company will operate under theNewFinance Capital brand, with its managing partners and senior executivescontinuing in their existing roles. NewFinance Capital's existing Opus Fundrange and investment process will remain unaffected, and the Schroders funds ofhedge funds business will continue to be managed by the current team beforecombining with NewFinance Capital after closing. Michael Dobson, Chief Executive of Schroders said, "This acquisition increasesour exposure to alternative investments, broadens our product offering toclients with a range of institutional quality funds and gives us critical massin an asset class which we believe will continue to be in demand by high networth and, increasingly, institutional investors. We are delighted to welcomeNewFinance Capital's team to the Schroder Group." Marc Hotimsky and Georges Saier, co-founders and managing partners of NewFinanceCapital, said "The NewFinance Capital team is excited to join forces withSchroders. This transaction ensures that we have the resources to continuebuilding our research platform and focus relentlessly on the performance of ourfunds. We will continue to run NewFinance Capital as a dynamic, separate fundsof hedge funds team. We look forward to leading the NewFinance Capital team formany years to come". The transaction is expected to be broadly neutral to Schroders' 2006 earningsafter the amortisation of intangible assets. Completion of the transaction issubject, inter alia, to regulatory approvals. Schroders was advised by Lexicon Partners Limited in this transaction. Schroders contacts Michael Dobson, Chief Executive +44 (0)20 7658 6962Henrietta Jowitt, Head of Marketing and Communications +44 (0)20 7658 6166 This information is provided by RNS The company news service from the London Stock Exchange

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