MDP in biggest asset manager buyout

Chicago-based Madison Dearborn Partners has bought Nuveen Investments, the biggest manager of closed-ended mutual funds in the US, for $5.75 billion. The deal would be the biggest leveraged buyout of an asset manager to date.

New York-listed Nuveen Investments, a US asset manager, has accepted Madison Dearborn Partners’ $5.75 billion (€4.29 billion) takeover bid. Madison Dearborn and a consortium of bidders have offered $65 per share for the company – 20 percent more than Nuveen’s closing share price on Tuesday.

Other members of the buyout consortium include US investment banks Citi, Deutsche Bank, Merrill Lynch and Morgan Stanley. Nuveen’s board is entitled to seek better offers between now and 19 July.

Nuveen’s profits increased 17 percent to $52.3 million in the first quarter of 2007 while operating sales increased 23 percent to $196.8 million. The company’s shares are trading up 16.58 percent at $63.14 which makes Nuveen’s market capitalisation $5.02 billion.

The asset management sector has become a popular destination for private equity capital. Boston-based TA Associates bought Commerzbank’s Jupiter Asset Management business for £740 million in March while Hellman & Friedman bought Gartmore Investment Management for £550 million in May 2006.

Founded in 1992, Madison Dearborn is currently investing its fifth fund with $6.5 billion of capital commitments. The firm bought tech/electronics retailer CDW for $7.3 billion in May and The Topps Company, owner of Major League baseball trading cards and Bazooka bubblegum, for $385 million in March.