Management Participate In Buyout Of Jersey Hedge Fund

by Jason Gorringe, Tax-News.com, London

14 March 2006

Liberty Ermitage Jersey Limited has announced that it has entered into a definitive agreement to complete a management buy out of the company from Liberty Group of South Africa.

The company, which has over $4 billion of assets under management, is being acquired by a new vehicle to be owned 60% by Caledonia Investments and 40% by Ermitage’s management and Paul Myners, who will be the new chairman.

The transaction is subject to the customary regulatory approvals and is scheduled to conclude during the second quarter of 2006. Following regulatory approval, the company will revert to its original name of Ermitage, which was the trading name of the Jersey based company first established in 1975.

One of the cornerstones of the agreement is the continuity of the senior management team who, together, have been responsible for the company’s expansion since 2001. Led by Ian Cadby (CEO/CIO), Ermitage’s management team of Mark Hucker, Andrew Whelan, Jonathan Wauton and Sarah Allen have all signed 5 year contracts within the new company structure.

Ermitage’s new group board will be extended to include Tim Ingram and Jamie Cayzer-Colvin (directors of Caledonia), together with Paul Myners who will become chairman and will also invest in the company.

Caledonia Investments is a UK investment trust company, listed on the London Stock Exchange, which invests in and actively manages a focused portfolio of significant stakes in companies and situations where it believe there are good opportunities for building value.

Caledonia has an experienced investment management team, including members of the Cayzer family, which built Caledonia from its roots as a shipping company.

Commenting on the announcement, Ian Cadby, CEO/CIO of Ermitage said: "This agreement is great news for the company, our staff and investors, and was always the preferred strategy of the management team.

"Over the last five years our management team has positioned Ermitage to be one of the key players in the European Hedge Fund of Funds and Hedge Fund seeding business. This success and future potential was instrumental in our decision to structure a MBO, and is indicative of our positive attitude towards the industry.

"We could not ask for a more supportive investor than Caledonia, who will help us to continue our organic growth strategy, focusing on our core capabilities of managing fund of fund investments and offering a broader and stronger product range to our clients in the institutional, retail and private client sectors.”

Paul Myners, chairman-designate of Ermitage commented: “Ian and his team have established a very strong position in the sweet spot of the market at a time when there is great further potential. I am very much looking forward to helping take Ermitage forward.”

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