Diversified Global Asset Management is a global manager of hedge funds with over $6.7 billion in managed and advised assets.
David Rubenstein/ Getty
Yesterday the Carlyle Group announced it had closed the deal to acquire the Diversified Global Asset Management group (DGAM), of Toronto, Canada, under the terms of an agreement which was first announced in November 26th, 2013. The price was not disclosed.
DGAM is a global manager of hedge funds and has more than US$6.7 billion of assets under management. The firm will continue to be led by its Chief Executive Officer George Main, and its Chief Investment Officer Warren Wright.
DGAM is what is known as a “fund of funds”, or in this case actually, a “fund of hedge funds”. As such it does not invest directly in businesses itself, but rather in hedge funds which do. By standing above the fray, and as it were at a meta level, it is claimed that greater diversification of funds can be achieved and therefore more reliably consistent returns. For DGAM’s investors, however, any benefit this brings is then offset by the fact that fees are being creamed off the top twice; first by the hedge funds DGAM invests in, and then by DGAM itself.
Clearly Carlyle must be impressed enough by their results to want to buy them, and DGAM now becomes Carlyle’s new “fund of funds” platform.
David M. Rubenstein, Co-Founder and Co-Chief Executive Officer of Carlyle, said when they first announced the deal, “We are focused on providing fund investors with a broad suite of investment options under one roof. With the DGAM partnership, Carlyle’s “Solutions” platform is now positioned to offer investors the ability to allocate across alternatives in hedge funds, private equity and real estate.”
Jacques Chappuis, Carlyle Managing Director and Head of the Solutions group, said then as well, “DGAM’s proven ability to create customized hedge fund portfolios complements and augments our private equity and real estate fund of funds capabilities, allowing us to offer more holistic investment solutions. We are pleased to welcome George Main and his team to Carlyle.”
DGAM will now join Carlyle’s Solutions platform alongside AlpInvest Partners, a global private equity fund of funds business with $48 billion of assets under management, and Metropolitan Real Estate Equity Management, LLC, a global real estate multi-manager with US$2.6 billion in capital commitments. Including DGAM, the Solutions segment had assets under management of over US$57 billion as of September 30, 2013
Established in 2004, DGAM was an independent alternative investment manager and advisor based in Toronto. Founders George Main, Warren Wright, Graham Thouret and Jeff Lucassen continue with the firm. DGAM’s client base is 100% institutional and includes some of the world’s biggest public and private pension funds, endowments and sovereign wealth funds.
The Carlyle Group is a global alternative asset manager, kisted on Nasdaq, with US$185 billion of assets under management across 122 funds and 81 fund of funds vehicles at September 30th, 2013.
Carlyle invests in a number of business segments and has expertise in various industries, including: aerospace, defense & government services, consumer & retail, energy, financial services, healthcare, industrial, technology & business services, telecommunications & media and transportation.
The Carlyle Group employs more than 1, 450 people in 34 offices across six continents.
About David Rubenstein
David Rubenstein was born and raised in Baltimore, Maryland. He graduated from Duke University in Durham, North Carolina before going on to earn his law degree at the University Of Chicago Law School. After graduation Rubenstein went on to practice law with Paul, Weiss, Rifkind, Wharton & Garrison in New York, and later became domestic policy advisor to President Jimmy Carter during the late seventies.
After Carter lost the Presidency to Ronald Reagan, Rubinstein established his own private law practice, before going into partnership with William E. Conway, Jr. and Daniel A. D’Aniello to form the Carlyle Group in 1987 as an alternative asset management and investment company.
Rubenstein is estimated to have a net worth of US$3 billion, and is recognized as being a member of the Giving Pledge, a group of wealthy Americans who have pledged to donate more than half of their wealth to philanthropic causes or charities during their lifetime.