Moelis Said to Plan Acquisition of Gracie Credit to Add First Hedge Fund
Moelis & Co., the New York-based investment bank founded by Kenneth Moelis, plans to buy the $2 billion Gracie Credit Opportunities Fund to expand into hedge funds, according to two people briefed on the talks.
Gracie, headed by founder Daniel Nir, will operate independently of Moelis, the people said. The deal price wasn’t known, said the people, who asked not to be identified because the negotiations are private.
Pen Pendleton, a spokesman for Moelis, and Dan Gagnier, a spokesman for New York-based Gracie, declined to comment.
Investment banks are adding to their asset-management businesses to diversify revenue sources after the financial crisis that froze credit markets in mid-2007. In March, New York-based Evercore Partners Inc., founded by former U.S. Deputy Treasury Secretary Roger Altman, agreed to buy a 49 percent stake in money-manager Atalanta Sosnoff Capital LLC, also based in New York, for as much as $83.3 million in cash and stock.
Nir founded his firm as Gracie Capital in 1999 and opened the Credit Opportunities Fund in 2004. The fund has averaged gains of about 13 percent a year since inception, according to the people.
Nir liquidated a Gracie fund in 2008 that focused on companies going through mergers and other corporate events.
Gracie executives will get a stake in Moelis’s firm, and Nir has agreed to stay on for at least two years, the people said. Gracie partners James Palmisciano, Manbir Singh, Michael Robertson and Alex Koundourakis will remain for at least five years, according to the people. Gracie has 30 employees, including 18 investment professionals.
Moelis, 52, started his firm three years ago after quitting his job at Zurich’s UBS AG, where ran investment banking.
Moelis & Co. runs a private-equity fund in addition to advising companies on mergers and restructurings. Private-equity firms pool investor money to take over companies, financing the purchases mostly with debt, with the intention of selling them later for a profit.
To contact the reporter on this story: Katherine Burton in New York at kburton@bloomberg.net
To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net
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