By Juliet Chung
Deutsche Bank AG is in advanced talks to sell its minority stake
in London-based hedge-fund firm Arrowgrass Capital Partners LLP to
Foundation Capital Partners, according to people familiar with the
matter.
Foundation, a private-equity firm, is expected to pay between
$100 million and $200 million for a more than 20% stake in
Arrowgrass, which would include Deutsche Bank's 17.5% share, plus
additional equity, one of the people said. The deal could wrap up
as soon as this month and would value Arrowgrass, which manages
about $5 billion as a multistrategy fund, at more than $500
million.
In return, Foundation would share in the stream of management
and performance fees brought in by Arrowgrass, which spun out of
Deutsche during the financial crisis.
The deal comes amid a rise in deal-making for minority stakes in
hedge funds as several firms, including Blackstone Group LP and
Neuberger Berman's Dyal Capital Partners, have raised billions in
private-equity funds to buy such stakes. Foundation, based in
Greenwich, Conn., is headed by former Citigroup and Deutsche
executive Dean Barr.
Basel III regulations that impose tougher rules on how big banks
manage risks and stockpile capital are a factor encouraging
Deutsche to sell its stake, one of the people said.
Write to Juliet Chung at juliet.chung@wsj.com
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