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Crestview to buy Munder for $302m

Private equity firm Crestview Partners, in an unusual intramural move, has reached a deal to acquire bank Comerica’s investment management firm Munder Capital for $302m.

New York-based private equity firm Crestview Partners will buy Detroit bank Comerica’s 90-percent stake in Munder Capital Management, in a $302 million (€234 million) deal that includes $232 million in cash.

The remaining $70 million will be in the form of an eight percent interest-bearing seven-year note, to be realised if Munder client revenues remain at current levels during that time. Grail Partners, a Boston-based merchant banking firm which advised Munder’s management team, will also invest in the buyout, according to the announcement.

Munder will keep $25.1 billion of the current $41 billion in assets it has under management, while Comerica will remain its largest client. Comerica will retain control of Munder’s World Asset Management unit, which has $15.9 billion in indexed assets and acts as a sub-advisor for mutual funds.

In a separate deal announced today, Hellman & Friedman announced an investment in turnaround firm AlixPartners. Terms were not disclosed.

Comerica will use the proceeds of the sale to buy back shares and invest in high-growth markets. The deal is expected to close in late 2006.

Like Comerica, the Seattle-based savings and loan Washington Mutual also recently cut a management company loose. Last week it agreed to sell its mutual-fund management business WM Advisors to Des Moines, Iowa-based retirement fund Principal Financial Group for $740 million.

Crestview was formed in 2005 by former Goldman Sachs investment bankers Barry Volpert and Tom Murphy, and is currently managing its first fund of more than $1.4 billion. Its investments have, up to now, generally focused on distressed businesses, and have included stakes in the cable and reinsurance industries.