Today, we do have an interesting deal.
An investor group made up of General Atlantic, Robert Bass and senior management has bought a minority stake in Oak Hill Advisors. iStar Financial, a REIT, was the seller, according to a statement. Financial terms weren’t announced.
Oak Hill Advisors, which has $12.8 billion of capital, is a distressed investor. iStar Financial acquired the stake in 2005. With the sale, Oak Hill’s management increases its majority holding while GA, with Bass, comes in as minority investors.
The sale was an auction. While it’s unclear when the process started, Oak Hill hired Citi and Morgan Stanley to run it.
General Atlantic, the Greenwich, Conn.-based growth equity firm, is strong in financial services having invested in E*Trade and Archipelago (which later merged with the NYSE). Oak Hill is GA’s first investment in a distressed or private equity firm, says Pat Hedley, a spokeswoman.
General Atlantic manages $17 billion in capital and does participate in majority and minority stakes. The firm typically invests from $50 million to $500 million per deal while its sweet spot is $200 million, Hedley says. She declined to disclose how much GA invested.
For his part, Bass is the Texas billionaire that frequently makes the Forbes 400 Richest Americans list and who reportedly contributes to the Democratic party. His investment in Oak Hill Advisors is not new; Bass co-founded Oak Hill’s first investment fund. He is president of Keystone Group, which invests in real estate, oil and gas. Bass is also the founder of the Oak Hill investment funds.
General Atlantic did not use an outside financial advisor. David Moody and Neil Freeman of Purrington Moody Weil provided legal advice.