18/04/2011
By Matt Ritchie
Principal Global Investors has announced a definitive agreement to acquire a majority stake in London-headquartered emerging markets investor Finisterre Capital.
In a statement, Principal said the five Finisterre Capital partners - Frode Foss-Skiftesvik, Paul Crean, Rafaël Biosse Duplan, Xavier Corin-Mick, and Yan Swiderski - will retain a significant minority stake in the business and have agreed to put a significant share of their consideration into funds managed by the firm. They will also continue to direct the day-to-day operations and will retain authority over fund investment decisions.
The move is part of Principal's 2011 capital deployment strategy of spending approximately $700 million on executing M&A opportunities and a share repurchase programme. Excluding transaction and integration costs, the company estimates the acquisition will be earnings per share neutral in 2011 and accretive in 2012.
Chief investment officer at Finisterre Capital Paul Crean said the transaction will enable the firm to expand its capabilities whilst preserving its business focus, organisational structure, and investment culture.
"The strategic partnership with Principal offers us the very attractive combination of continued autonomy and long-term stability for our clients," Crean said.
Principal chief executive Jim McCaughan said Finisterre is a top class emerging market fixed income specialist, with a “strong investment performance track record".
"We are excited about the opportunity to help the business develop further and expand our capabilities in this growing market segment. There is already an enormous appetite to invest in emerging economies and we firmly believe the demand will continue as these markets develop," McCaughan said.
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