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Peregrine to acquire majority stake in UK fund of hedge funds manager

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South Africa’s Peregrine group has concluded a non-binding agreement to acquire at least 65 per cent of Stenham Group, a UK-based wealth management firm specialising in alternative investm

South Africa’s Peregrine group has concluded a non-binding agreement to acquire at least 65 per cent of Stenham Group, a UK-based wealth management firm specialising in alternative investments.

The parties hope the sale will be completed not later than the end of February, subject to regulatory and shareholder approval. Peregrine plans to fund the purchase through a combination of internal resources and new debt.

The Stenham Group was founded in 1901 and is an independent privately-owned wealth and asset management group providing financial solutions and products to high net worth private clients and institutions. The group has more than USD4bn under management, with more than USD2bn in its funds of hedge funds and a further USD2bn in property investments.

It has core operating offices in the Channel Islands and the UK, with marketing and client services in South Africa, Israel and the Netherlands.

According to Peregrine, the purchase of a controlling interest in Stenham will enhance its position as a provider of wealth and asset management solutions to high net worth individuals and selected institutional investors.

It will meaningfully boost Peregrine’s strategy of building capacity in selected areas of the hedge fund industry, thanks to Stenham’s long-established reputation and 20-year track record in running multi-manager hedge fund portfolios and funds of funds.

The addition of a property investment and management business will further diversify the nature of the revenue streams earned by Peregrine. The type of operation and the key skills of the management team have enabled this division to generate excellent returns from the asset class over time in differing market conditions and various international jurisdictions.

Directly or through a wholly-owned subsidiary, Peregrine will acquire at least 65 per cent of the shares in Stenham from Stenham Group Holdings for a purchase price based on an enterprise value of GBP150m, from which external debt (currently in the region of GBP11.3m) will be deducted.

Certain ultimate shareholders of Stenham Group will be given an opportunity to sell more than 65 per cent of their indirect shareholding, in which event Peregrine will acquire the additional shareholding, while other shareholders will be required to retain a greater proportion of their shareholding. The exact percentage holding to be acquired by Peregrine cannot currently be determined precisely but will be between 65 and 75 per cent.

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