NEW YORK and SYDNEY, Nov. 9, 2020 – Channel Capital Pty Ltd. (Channel), a leading Australian multi-affiliate investment management company servicing more than A$16 billion in assets, will undertake a management buyout from minority equity partner Highbury Partnership (Highbury), subject to customary approvals.
New York-based Kudu Investment Management, LLC (Kudu), an independent provider of permanent capital solutions to asset and wealth managers, is providing financing for the buyout and additional capital for the firm. Upon completion of the transaction, expected in November, Channel’s employee shareholders will control a greater share of the diversified investment management group. Kudu will own a passive, minority share in the business. Financial terms were not disclosed.
Channel provides incubation, operations, distribution, marketing and responsible entity services to a select group of investment management companies and their clients across the institutional, family office, high net worth and advisor-led investor space in Australia and New Zealand. Channel’s subsidiary, Channel Investment Management Limited (CIML), is licensed as a responsible entity in Australia, enabling it to act as both trustee and manager.
“While the business has prospered in partnership with Highbury, we’ve reached the next level of growth, requiring a renewed strategy to both consolidate and capitalise on what we’ve built,” said Glen Holding, Channel’s co-founder and managing director. “Partnering with Kudu will greatly enhance our ability to pursue larger growth opportunities both within and outside of Australia."
“As our first transaction in Australia, one of the world’s largest pension markets, we jumped at the chance to support Channel in achieving its full potential,” said Charles Ruffel, chairman and managing partner of Kudu. “Channel’s leadership and strong focus on investor outcomes permeate the organisation, and we look forward to a long and fruitful working relationship in Australia and globally.”
Established in 2013, Channel has 27 employees across Sydney, Brisbane and Melbourne. Channel currently partners with eight investment management firms. Channel subsidiary CIML provides responsible entity services to a limited set of funds managed or advised by its partner firms as well as a select group of institutions.
With Channel, Kudu will have 14 affiliated firms that collectively manage or advise approximately US$75 billion on behalf of individual and institutional investors worldwide in traditional and alternative strategies, as of Sept. 30, 2020. Kudu, with US$475 million in capital commitments to date, is backed by White Mountains Insurance Group, Ltd. (NYSE: WTM), a financial services holding company.
Berkshire Global Advisors served as financial advisor and Hall and Wilcox served as legal advisor to Channel. Minter Ellison served as legal advisor to Kudu.
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