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.<\/p>\n
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.<\/p>\n
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.<\/p>\n
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.<\/p>\n
That growth has attracted several established financial-services companies and sparked acquisitions in recent years.<\/p>\n