Duff Cap Buying Hedge Fund North Sound

BOSTON 1 (Reuters) – Investment firm Duff Capital Advisors said on Tuesday it acquired hedge fund group North Sound Capital.

The two firms, both located in Greenwich, Connecticut, did not disclose terms of the deal.

For Duff Capital, which launched in March with the goal of raising between $1 billion and $1.5 billion to seed investment strategies, this marks its second hedge fund investment.

For North Sound Capital, whose assets have shrunk from $2.9 billion in 2006 to $1 billion now, the deal is a chance to join forces with Philip Duff, a Wall Street veteran with a track record of growing investment firms.

Both Duff and North Sound's founder Tom McAuley once worked for Tiger Management, run by legendary hedge fund investor Julian Robertson.

More recently Duff has been better known for having grown hedge fund group FrontPoint Partners into a $5.5 billion organization that attracted teams of managers to work mostly independently under one roof. Morgan Stanley, where Duff was once chief financial officer, bought FrontPoint in 2006 for about $400 million.

North Sound, which specializes in buying and selling stocks short, has endured several rocky years. A number of investors and a number of employees quit the firm in 2006 before returns recovered dramatically in 2007, only to fall off again in January of 2008, when many hedge funds nursed heavy losses.

(Reporting by Svea Herbst-Bayliss; Editing by Brian Moss)