Liberty Ermitage Mulling Sale

The $4 billion fund-of-funds has had several offers.
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Liberty Ermitage, a $4 billion international fund-of-funds based in the Channel Island of Jersey, is exploring the possibility of a sale. South Africa-based parent company Liberty Group recently hired Hawkpoint, a European mergers-and-acquisitions advisory firm, to determine the subsidiary's value.

"We were not interested in selling until we received a fair amount of interest," said Ian Cadby, CEO of Liberty Ermitage. Cadby says that in the last year, he's received five unsolicited offers for his company. "We want to know what's the value of a fund-of-funds like ours. How much is it really worth?"

A mix of investment management companies, investment banks and insurance companies expressed interest. Asset-management companies especially, he said, are interested in owning alternative investment operations because they understand that "growing this business organically is difficult."

A potential deal is part of a trend in which hedge funds and fund-of-funds shops have recently gone up for grabs. Last year,

J.P. Morgan

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bought a majority stake in Highbridge Capital. More recently,

Legg Mason

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acquired Permal Group, a large global fund of funds manager. Even private equity firms have entered the race with Summit Partners announcing earlier this month its purchase of a third of Santa Monica-based hedge fund Coast Asset Management.

Liberty Group, based in Johannesburg, is majority owned by Standard Bank, a South African financial services company.

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