Bloomberg News

Arden Takes Over Robeco Group’s Hedge Fund of Funds Business

June 02, 2011

June 2 (Bloomberg) -- Arden Asset Management LLC, a New York-based firm that farms money out to hedge funds, plans to take over Robeco Group’s $1.3 billion hedge fund of funds business.

The transfer, scheduled to close on Oct. 1, will bring Arden’s assets to $8.5 billion, Arden said in a statement today. The two companies did not disclose details of the transaction. Generally, such deals involve a sharing of revenue.

“We look forward to continuing to serve our combined investor base with a broad range of institutional multimanager hedge-fund portfolios as we strategically expand our business,” Averell Mortimer, Arden’s chief executive officer, said in the statement.

Arden’s takeover of Robeco-Sage, as the unit of the Rotterdam-based money manager is known, comes as the hedge fund of funds business is contracting. In 2007, fund of funds accounted for 43 percent of industry assets, according to Chicago-based Hedge Fund Research Inc. Today, they account for about 34 percent.

Paul Platkin, Robeco-Sage’s chief investment officer, and Darren Wolf, head of research, will join Arden’s investment team and continue to manage the Robeco-Sage portfolios.

Arden, founded in 1993 by Mortimer, did a similar deal with JPMorgan Chase & Co. in June 2009, when it took over the $1.1 billion in hedge-fund investments the bank made with its own money.

Shakil Riaz, the JPMorgan executive who had run the hedge- fund holdings since 1995, joined Arden at that time.

The agreement was part of JPMorgan’s decision to disband an investment-banking group that invested the lender’s money in hedge funds, private equity and real estate.

Arden Institutional Advisers LP, the firm’s main fund, has posted an average return of 8 percent a year since October 1993, beating the 6.2 percent gain for Hedge Fund Research’s fund of funds index. About 80 percent of Arden’s assets come from institutional investors.

--With assistance from Saijel Kishan in New York. Editors: Steven Crabill, Rick Green

To contact the reporter on this story: Katherine Burton in New York at kburton@bloomberg.net

To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net


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