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Crestline acquires Northwater hedge fund of funds and beta overlay assets

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Crestline Investors has acquired certain assets related to Northwater Capital Management’s hedge fund of funds and beta overlay investment management businesses.

Financial details of the transaction were not disclosed.

As part of the transaction, Crestline will establish an affiliate office in Toronto to serve existing and acquired Canadian client accounts and build additional relationships within the Canadian investment community.

Paul Robson, former president of Northwater, will lead Crestline’s Canadian business efforts as president of Crestline Canada. Robson is one of six professionals joining Crestline to transition and continue management of the client accounts, which are managed on behalf of corporate and public pension plans, multi-employer plans, charitable foundations and university endowments.

The acquisition increases Crestline’s total assets under management to approximately USD5.8bn. The acquisition includes USD683m of Northwater client hedge fund of funds assets bringing total Crestline hedge fund of funds assets to USD4.3bn plus USD1.5bn of Northwater client beta overlay investment management business.

"This transaction marks a solid step forward in our strategy to increase the scale of our investment management business, diversify our client base and expand our presence in new markets," says Douglas K. Bratton, president and chief investment officer of Crestline. "It also significantly strengthens our investment capabilities and allows us to offer enhanced hedging strategies and options for more effective asset allocation and overall management of institutional hedge fund programs. The tenured Northwater team brings a long-term track record to Crestline and we look forward to working with them to build our platform in Canada."

"The transfer of these assets to Crestline was in the best interest of our clients and is a strategic step that will allow us to better focus our resources on our intellectual property fund business and other growth initiatives we have identified," says David Patterson, chief executive officer of Northwater. "Crestline and Northwater share similar investment strategies, philosophies and cultures. Crestline has an excellent reputation among institutional investors and consultants and an outstanding track record in hedge fund of funds investing. I am confident that the clients transferring to Crestline will continue to be well-served."

Jefferies & Company was the exclusive financial adviser to this transaction.

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