TA Associates, a US private equity firm, is set to win the €1 billion race for UK fund manager Jupiter Asset Management, after rival group Candover withdrew from the bidding.
TA will back a management buyout led by Edward Bonham Carter, Jupiter’s chief executive, in a deal that will value the fund manager at about €1 billion. The company is currently owned by German investment bank Commerzbank, which has been looking to exit the business since last summer.
Candover had seemed to be in pole position to buy Jupiter, but the UK buyout group walked away from the deal last week after failing to reach agreement with the management team over their valuation of the business, according to a banking source.
It would not be TA’s first asset management deal. The Boston-based buyout firm has done over 20 deals in the financial services sector, with current investments including Numeric Investors, a US quantitative fund manager. However, this would be its first UK deal in the sector.
The sale to TA would bring to an end a long-running saga. Commerzbank had appeared to favour a flotation of Jupiter, but the company’s management is thought to have been reluctant to take the company public. The team subsequently held talks with a number of private equity groups, including The Blackstone Group, before TA and Candover emerged as the favourites.
Commerzbank first invested in Jupiter in 1995, buying a 75 percent stake for £175million. It then bought the remaining 25 per cent for £500m in 2000. Soon after, Jupiter’s founder John Duffield walked out after a row with Commerzbank to found New Star Asset Management – now one of Jupiter’s biggest competitors.