Liberty Group, the South African financial services giant, has announced the purchase of 100 per cent of the share capital of Liberty Ermitage Group, the UK hedge fund firm it previously held a stake in, from Liberty International PLC. The cost of the deal is £33.5m in cash, subject to the approvals of the regulators both in South Africa and in the jurisdictions where the Liberty Ermitage Group operates.
The Liberty Ermitage Group currently has around US$2 billion in funds under management and is active in Jersey, Bermuda, Luxembourg and London. Its major business areas are hedge funds, Standard & Poors AAAm rated money funds and a range of conventional funds designed primarily for the Liberty Group and its client base. Roy Andersen, Chief Executive of the Liberty Group, commented: 'There are few competitors who offer the totally integrated hedge fund capability of Liberty Ermitage, which is seen as a key differentiator from other financial institutions and consultants operating in the hedge fund industry.'
The Liberty Ermitage Group was founded in April 1996, initially as Liberty International Jersey limited, a wholly owned subsidiary of Liberty International PLC, at a time when Liberty International PLC was a 74 per cent owned subsidiary of Liberty Group (formerly Liberty Life Association of Africa). The two key objectives of Liberty International Jersey were to establish a highly focused and independent offshore funds group and to provide a range of offshore investment products to meet the requirements of Liberty Group's South African client base. In October 1998, Liberty International Jersey acquired a 40 per cent stake in the Ermitage Group, which specialised in hedge funds. This stake was increased to 100 per cent in January 2000 and the entire offshore group renamed the Liberty Ermitage Group.
Mr Andersen said of his group's latest acquisition: 'Liberty Group has been keen to acquire a direct and controlling interest in the Liberty Ermitage Group for some time, as it provides the means of retaining and enhancing access to Liberty Ermitage funds for South African clients, following the decision of Liberty International PLC to withdraw from the financial services industry. It also provides a strong foothold in the rapidly expanding alternative investment sector. We have worked very closely with senior management of the group over the last four years and I have no doubt that their wide international experience and contacts will be of tremendous benefit to us, as we develop our future plans.'
Ron Mitchell, Chief Executive of the Liberty Ermitage Group, said: 'We have an excellent rapport with all levels of Liberty Group management and have absolutely no doubt that the strong financial backing and distribution capability of our new parent will allow us to exploit the full potential of the Liberty Ermitage business. This is a strong strategic fit and one that does not impact on either our client base or indeed our team, as we are essentially returning to the position we enjoyed eighteen months ago.' He added: 'The Liberty Group and the wider Standard Bank Group gives Liberty Ermitage an excellent platform to become the dominant supplier of alternative investment products to the South African market place.'
Liberty International PLC has sold Liberty Ermitage in order to focus on its property investments. The move follows the sale of Liberty Pensions to Schroder Investment Management earlier this year.
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