Alternative investment manager Coast Asset Management has sold a minority ownership interest to private equity and venture capital firm Summit Partners.
Summit Partners led the USD 126.8 million investment and now holds a stake equal to approximately one-third of Coast, which was founded in 1991 and offers various managed-volatility hedge fund investment strategies.
Founded in 1984, Summit has previously raised nearly USD 9 billion in capital and invested in 270 growing companies across North America, Europe, and Asia.
"We are very pleased to welcome Coast to our portfolio of leadership companies in financial services," said Peter Y Chung, General Partner, Summit Partners, who will join Coast's Board of Directors. "Coast is a unique firm in the fund of hedge funds sector. We have been very impressed with their outstanding professional team and their disciplined investing strategy."
J. Scott Carter, a Principal at Summit who will also join the Coast Board, added, "We look forward to working closely with the Coast team in broadening their investor base and in the development of additional innovative products."
Coast's diversified portfolio spans four investment strategies -- fixed income arbitrage, diversified credit spread investment opportunities, special situations investments, and multi-manager fund of hedge funds. Coast is registered as an investment adviser with the Securities and Exchange Commission and is positioned within a market of attractive growth prospects. According to Hedge Fund Research, global hedge fund assets now exceed USD 1 trillion, representing an estimated 8,200 funds, including fund of funds.
"We've worked hard since our founding in 1991 to earn a reputation of excellence. We are excited to work with Summit Partners, an experienced private equity investor with deep knowledge in the financial services industry," said David E. Smith, President and Chief Executive Officer, Coast Asset Management. "Summit's strategic insights will assist us in seizing the opportunities ahead."
Investment banking firm Putnam Lovell NBF Securities Inc.and Mayer, Brown, Rowe & Maw LLP represented Coast Asset Management in the transaction. Kirkland & Ellis LLP served as legal counsel for Summit Partners.