Citi / Old Lane

[drs]

So Citi is buying Old Lane for $600million. Old Lane has $4.5 bil AUM.

So the going rate for hedge funds is .133 cents on the dollar?

It will be very interesting to see if this trend continues.

 

[kevin0118]

holy crap thats a lot of money...

$4.5bil * 2 and 20 = $90mil + performance...

Citi paid roughly 6x revenue for a hedgefund!

 

[Big Nodge]

What they really wanted was the big man running the shop, Vikram Pandit. They've been struggling to find the right guy to head their alternative investment group, and he's very well-respected in the industry. Many people were hoping he'd get the top job at MS before Mack came back into the picture. This could also set him up as a potential successor for Chuck Prince's job.

 

[commstudent]

Would he go from from MS to Citi? even for that much? I wonder how much he pulls in running Old Lane

 

[Super I]

drs Wrote:
-------------------------------------------------------
> So Citi is buying Old Lane for $600million. Old
> Lane has $4.5 bil AUM.
>
> So the going rate for hedge funds is .133 cents on
> the dollar?
>
> It will be very interesting to see if this trend
> continues.

from the way you phrased this not sure if you realize that AUM is not the same as equity. Kevin is more in line, with looking at a multiple of fees earned on those assets. Not sure 2% is the number.. it could be tho.

I worked on some fund manager buyouts in the late 90's, and I suspect that the potential purchase price is even higher. Future earnouts based on retention, performance over bogies, etc.

 

[guest]

SuperI is correct

fees will be something like x% of assets plus a performance based fee once you pass a hurdle rate

Trust God and keep your powder dry