Investors Business Daily -EFG International said on Monday that it agreed to buy hedge-fund firm Capital Management Advisors as the Swiss private bank responds to increased client demand foralternative investments.
The price of the deal wasn’t disclosed, but EFG said that the acquisition values Bermuda-based CMA at less than 10 times 2005 estimated net income. EFG hopes the firm will contribute 20 million Swiss francs in profit during 2006.
Half of the purchase price will be paid immediately, while the rest will be paid over a five-year “earn-out” period, EFG (002226822002226822) said in a statement on its Web site.
Hedge funds historically have been private-investment partnerships for wealthy investors and institutions, but their appeal is broadening. There are now about 8,000 funds overseeing more than $1 trillion in assets.
That growth has attracted several established financial-services companies and sparked acquisitions in recent years.
