Lovell Minnick Partners acquired a minority stake in Trea Asset Management, its first investment in a European company.
Terms of the deal, which closed Feb. 17, weren’t announced. Carlos Tusquets, chairman and founder, as well as Vice Chairman Ramón Betolaza and CEO/CIO Antonio Muñoz, retained a majority.
Trea, of Barcelona and Madrid, has 2.8 billion euros ($2.97 billion) of assets under management. It manages traditional mutual funds across equities, fixed-income, balanced and funds-of-funds.
Trea is using Lovell’s investment to buy Banco Madrid Asset Management. Last year, Trea won the auction of the unit after parent Banco Madrid went into bankruptcy, press reports said. Other bidders for Banco Madrid Asset Management include Santander Asset Management, Imantia Capital and Stormharbour Securities, press reports said.
The deal doesn’t include Black Toro Capital, said Steve Pierson, president of Lovell Minnick. Black Toro, a PE fund focused on mid-sized companies in Spain, joined Trea in 2013. Trea is getting 70 percent of Black Toro’s management fees, he said.
The acquisition will boost Trea’s assets under management to more than 4 billion euros ($4.24 billion) and create a new distribution partnership with Banco Mare Nostrum, a statement said.
The investment is Lovell’s first in a company not based in North America, Pierson said.
“We have tremendous faith in the Trea team to grow this into a very large business,” Pierson said. “We expect to do multiple follow-on transactions here.”
Lovell Minnick, the Radnor, Pennsylvania, financial-services-focused PE firm, has done 20 asset management deals over its lifetime, Pierson said. In fact, asset management is the asset class in which Lovell has the most experience, he said.
Lovell currently owns a stake in Matthews International Capital Management, an Asia investment specialist. It invested in the firm in 2011.
Lovell owns a minority of 361 Capital, which specializes in liquid alternative investments. The firm has also invested in ALPS, AssetMark and Berkeley Capital Management.
Other sectors it focuses on include financial planning, specialty finance, and insurance and securities brokerages. The PE firm typically invests $20 million to $100 million equity per deal.
To invest in Trea, Lovell used Fund IV, which closed with $750 million in 2015. The pool is just shy of half-invested, Pierson said, adding, “We’re not talking about the next fund.”
Rothschild & Co served as financial adviser to Lovell Minnick and GBS Finanzas advised Trea.
Trea could not be reached for comment.
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