Private equity firm Hg is to become a shareholder in investment ratings and research firm FE to create a partnership with its European fund ratings arm fundinfo.
It was announced today that HgCapital Trust plc will invest approximately £7.5m in FE, with other institutional clients of Hg investing alongside the company through the Mercury 2 Fund.
The terms of the transaction were not disclosed and completion is subject to regulatory approval.
Sebastien Briens, partner at Hg, said: "We have been following FE for a number of years, and have been impressed by the strength and depth of its data, products, team and vision. We are very pleased to partner with Michael, Craig and Neil in the next stage of growth for the business."
Neil Bradford, CEO at FE, said: "Hg's track record and experience in our sector means they are the perfect partner to continue FE's growth strategy and international expansion ambitions. We look forward to working with the Hg team."
Investment Week understands private equity firm Hg is becoming a shareholder in the business to create a partnership that will play to the respective strengths in FE and fundinfo.
The management teams of all three firms, including the new CEO of FE Neil Bradford, will work together to explore the best way to exploit the partnership.
Bradford recently joined FE in the newly-created role amid an expansion of the firm's growth plans.
Formerly Financial Express, FE was established over 20 years ago, founded by Michael Holland and Craig Wilson, who remain shareholders, and now has a presence in eight countries. As well as a ratings and research agency it makes available analytical data to the funds industry, runs the website Trustnet and recently launched a managed portfolio service for clients.
According to Companies House, FE shareholders currently include co-founders Holland, Wilson, CEO Bradford, as well as non-executive chairman Anthony Ward, operations director Dominic Timberlake, chief financial officer Matthew Lawrence, financial director Peter La Brooy and non-executive director Bernd Graap.
Hg began life as Mercury Private Equity, the private equity arm of Mercury Asset Management. Mercury AM was acquired by Merrill Lynch in 1997 and in December 2000, the executives of Mercury Private Equity negotiated independence from Merrill Lynch, and Hg was established as a fully-independent partnership.
Meanwhile, fundinfo was set up in 2005 as a technology platform of fund documents, data, ratings and fund manager videos. In 2016, it had 500 asset management clients and a network of over 100 distribution partners across Europe and Asia.
Hg announced in November 2016 it had taken "a significant investment" in fundinfo AG, which is headquartered in Zurich, Switzerland.
The statement at the time said Hg will partner with the existing directors of fundinfo, Michael Partin, Philipp Portmann, Jan Giller, Daniel Walter, Matthias Weber and Jochen Gutbrod - to accelerate the development of the business.
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