Lansdowne Partners agreed to purchase UK investment boutique Crux Asset Management. This move cements the company’s evolution from a top European hedge fund into a mainstream asset management.
Crux’s $1.1bn deal, which is largely aimed at UK Wealth Management clients demonstrates how shrinking margins and rising costs are forcing companies to adopt new strategies and increase distribution channels.
This is the first acquisition in Lansdowne’s 25-year existence. Lansdowne, founded in 1998 by Steven Heinz and Sir Paul Ruddock, was once considered the gold standard of equity investing. But its assets have shrunk from $21bn to $7bn in just five years.
Richard Pease will retire after the deal. He was a top manager at New Star Asset Management, then Henderson Group, before establishing Crux in 2015. Daniel Avigad will manage his two funds, as he is responsible for the European Long-Only Strategy at Lansdowne. The financial terms of the transaction were not disclosed.
Lansdowne’s UK equity hedge fund was synonymous for many years with the Lansdowne Developed markets fund. The fund was managed by Pete Davies, Stuart Roden and had an excellent long-term track record.
Lansdowne had assets of more than $12 billion when it sold a 19.5% stake to Morgan Stanley Investment Management. By the time Roden took retirement in 2018, that had grown to $21bn.
In recent years, its hedge fund business has struggled as the bull market that has lasted for more than a decade since the financial crises made it much harder to short shares and pick stocks.
Lansdowne announced that it would close the flagship fund for developed markets, managed by Davies and Jonathon Regis, in 2020 after a poor performance period.
Since then, the firm has primarily focused on investing in long-only investments which is more cost effective. Brian Heyworth, formerly of HSBC Asset Management, joined Lansdowne in early 2021 as a co-managing member to diversify the company beyond its institutional clients such as pension funds and endowments.
Last year, Crux, an independent financial service company with headquarters in Little Rock (Arkansas), sold a minor stake to Stephens.
Lansdowne will target the US and UK wealth management markets by leveraging Crux’s client relationship and Stephens’ partnership.