The Carlyle Group said on Tuesday that it would acquire the Diversified Global Asset Management Corporation, an independent hedge fund manager, the latest push by Carlyle into areas beyond its core leveraged-buyout business.
Carlyle will pay $33 million upfront and up to $70 million over the next seven years, depending on performance, according to a filing the company made with the Securities and Exchange Commission.
Diversified Global handles more than $6.7 billion in assets, according to a statement announcing the acquisition on Tuesday, and will become Carlyle’s fund of hedge funds platform.
The deal is expected to close in February 2014.
“We are focused on providing fund investors with a broad suite of investment options under one roof,†David M. Rubenstein, Carlyle’s co-founder and co-chief executive, said in the statement. “With the D.G.A.M. partnership, Carlyle’s solutions platform is now positioned to offer investors the ability to allocate across alternatives in hedge funds, private equity and real estate.â€
News of the purchase came one day after Carlyle announced it had raised a $13 billion fund aimed at leveraged buyouts in the United States. Still, the firm has increasingly diversified into areas beyond traditional private equity. Speaking at DealBook’s recent investment conference, Mr. Rubenstein said more than 15 percent of the company’s staff was now based in China, and the firm has experimented with new business models.
“I think increasingly firms like ours recognize that the classic buyout model isn’t as easy to do as it used to be,†Mr. Rubenstein said. “Virtually every deal we’ve done in China has been a noncontrol deal.â€
Of all the private equity firms that have gone public, Carlyle has been one of the most aggressive in adding assets under management through the acquisition of other money-management businesses. This month, Carlyle acquired Metropolitan Real Estate, a global real estate investor. It agreed in 2011 to purchase AlpInvest Partners, a private equity management firm.
The moves have expanded Carlyle’s efforts to provide more customized services to investors, according to a Carlyle spokesman. Diversified Global serves institutional clients with custom-built platforms and tailored advisory and other services.
George Main, Diversified Global’s chief executive, and Warren Wright, its chief investment officer, will remain in their positions after the deal. Mr. Main, Mr. Wright, F. Graham Thouret and Jeff Lucassen founded the firm, which is based in Toronto, in 2004.
Goldman Sachs advised Diversified Global.
