The US private equity multinational KKR has taken a 24.9% stake and entered into a long-term strategic partnership with Marshall Wace, one of London’s best-known hedge funds.
Under the agreement, KKR – which had a big stake in Pets at Home, the pet care retailer that floated in London last year – will have the option to increase its holding in Marshall Wace to up to 39.9%.
“Through this partnership, we increase meaningfully our breadth and capabilities,” Scott Nuttall, head of global capital and asset management at KKR, said. “This is a driver of fee growth for us ... and further diversifies our earnings.”
The shares are being sold by eight of Marshall Wace’s capital partners, including its founders, Paul Marshall and Ian Wace. They will be paid partly in KKR shares and partly in cash, which must be reinvested for five years in Marshall Wace investment funds.
Marshall, whose son Winston is a banjoist in the band Mumford & Sons, is a former Liberal Democrat donor and philanthropist. He was among a group of investors who in 2010 tried to put together a £1bn bid to take over Manchester United.
Wace is a well-known philanthropist whose first wife and two children were killed in a car accident. He chairs the international children’s charity Ark and has described the accident as “the motivating force” in his life.
Marshall Wace, which has built up more than $22bn (£14bn) of assets under management since it was founded in 1997, is a big player in the London markets and last year launched a £200m peer-to-peer lending investment trust, P2P. It has raised £870m to date.
Wace, who is now chief executive, said: “Over the last few years we have been approached by several firms looking to invest in our business, but KKR offered something different: a true, long-term partnership. While our core operations and investment process will not change, we believe we will be able to build on the complementary relationships and skills of both firms to meet our clients’ evolving requirements.”
