UPDATE: Schroders Buys 49% Stake In Hedge Fund Group RWC

22nd Jun 2010 14:31

(Adds details.) By Margot Patrick Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Schroders PLC (SDR.LN) Tuesday said it is taking a 49% stake in London hedge-fund operator RWC Partners Ltd., in the latest effort by a traditional stock and bond fund manager to boost its exposure to higher-fee hedge funds. Schroders didn't say how much it paid for the stake in the company, which manages $2.2 billion. Similar transactions, such as F&C Asset Management PLC's (FCAM.LN) GBP33.6 million purchase of Thames River Capital, and Man Group PLC's (EMG.LN) $1.6 billion buy of GLG Partners Inc. (GLG) have cost anywhere from 1% to 7% of assets under management, but those purchases involved taking full ownership. In a brief statement, Schroders said RWC will remain a separate legal entity and will continue to be managed by its existing management team. London-based RWC was set up in 2000, initially under the name MPC Investors Ltd. In May, it said two top-rated stock fund managers from Schroders, Nick Purves and Ian Lance, would join the company in August. RWC wasn't immediately available for comment. The hedge fund industry shrank in the aftermath of the 2008 financial crisis but has since rebuilt its assets back to around $1.7 trillion, not far off the $1.9 trillion peak registered by Hedge Fund Research Inc. in 2007. To appeal to institutional and wealthy retail investors, firms including RWC have been rolling out onshore products that have more transparency and oversight, and are meant to be easier for investors to cash out of when they want to. Schroders shares at 1320 GMT were down 8 pence, or 0.6%, at 1,313 pence, a smaller decline than most of its peers, shortly after details of a spate of tax rises were announced by U.K. Chancellor of the Exchequer George Osborne. -By Margot Patrick, Dow Jones Newswires; +44 (0)20 7842 9451; [email protected] (END) Dow Jones Newswires June 22, 2010 09:31 ET (13:31 GMT)