Private equity firm TA Associates has acquired a minority stake in Evanston Capital Management, an Illinois-based hedge fund-of-funds manager. Financial terms of the deal were not released. The private equity firm will not likely make add-on deals to support the transaction; Evanston will serve as a stand-alone investment. Middle-market buyout shop TA Associates has more than $16 billion in capital, and offices in Boston, London, Mumbai, and Menlo Park, Calif. TA invested through several funds under its management to complete the deal.
TA Associates, a leading private equity firm, today announced that certain of its private equity funds and subordinated debt funds (collectively, “TA”) have completed an investment in Evanston Capital Management, LLC (“Evanston Capital”), a well-established, institutional hedge fund-of-funds manager. As a result of the transaction, TA will become a minority partner in Evanston Capital, alongside the existing Evanston Capital management team. Terms of the investment were not disclosed.
Evanston Capital was founded in 2002 by David Wagner, former Vice President and Chief Investment Officer of Northwestern University. As of December 31, 2010, Evanston Capital had approximately $4.2 billion in assets under management across two commingled hedge fund-of-funds products. There are no changes planned to Evanston Capital’s investment philosophy and process, day-to-day operations or personnel. Evanston Capital is headquartered in Evanston, Illinois and is an SEC registered investment adviser.
“We are pleased to align ourselves with TA and this transaction sets the stage for a multi-generational ownership structure,” said David Wagner, Founder and CEO of Evanston Capital. “This transaction enables our firm to evolve, while allowing us to maintain our culture and our investment decision-making processes, and pursue our business plans.”
David Wagner will remain the CEO of Evanston Capital and will continue to be active in the business for the foreseeable future. Further, all Principals of Evanston Capital have entered into multi-year employment arrangements and new non-competition agreements, and plan to continue to invest a substantial amount of their liquid net worth in the funds managed by Evanston Capital. Evanston Capital and TA have also committed to an equity incentive plan that will transfer further ownership to additional employees over the next several years.
“Evanston Capital has a blue-chip management team with a long track record of successfully investing in hedge funds,” said Todd Crockett, a Managing Director at TA who will join Evanston Capital’s Board of Managers. “Based on a proven and rigorous investment process, the firm is focused on delivering top-tier results and high-touch investor service and reporting. We anticipate Evanston Capital will continue its pace of measured growth and look forward to helping management pursue their objectives and to further build value in the company.”
TA is one of the most respected and experienced investors in investment management companies in the world, having invested in 13 firms over the course of the last 22 years. TA’s prior investments in the asset management industry include Affiliated Managers Group, AIM Management Group (INVESCO PLC), First Eagle Investment Management, Jupiter Fund Management, K2 Advisors, Thomson Advisory Group (PIMCO) and Numeric Investors.
“It’s clear to us that TA understands our business and we view them as a top-tier provider of capital to firms such as ours,” said Adam Blitz, CIO of Evanston Capital. “TA has a proven track record of supporting existing management in continuing their day-to-day operation of the firms in which they invest, and this was important to us.”
“Despite difficulties in the global economy over the past few years, Evanston Capital has had outstanding performance and consistent asset growth since its founding,” said James Hart, a Principal at TA who will also join Evanston Capital’s Board of Managers. “The firm’s funds have an attractive investor base of more than 400 investors, as well as relationships with several dozen investment consulting firms, a primary source of new investors in the hedge fund-of-funds industry.”
Sidley Austin LLP acted as legal advisors to Evanston Capital in the transaction and Keith Mitchell of Mitchell Hartley Advisers, LLC acted as financial advisor to the firm. Goodwin Procter LLP acted as legal advisor to TA.
About Evanston Capital Management, LLC
Evanston Capital is an SEC registered investment adviser formed in 2002 and focuses on delivering hedge fund-of-fund strategies to both institutional and high net worth/family office investors. Evanston Capital currently manages approximately $4.2 billion in assets for over 400 investor relationships. Principals and professionals at Evanston Capital bring together a complementary set of skills to create a cohesive culture focused on delivering competitive performance coupled with a high touch, transparent investor experience.
About TA Associates
Founded in 1968, TA Associates is one of the largest and most experienced middle market private equity firms. The firm has invested in over 400 companies and manages more than $16 billion in capital. With offices in Boston, London, Menlo Park and Mumbai, TA Associates leads buyouts and minority recapitalizations of profitable growth companies in the technology, financial services, business services, healthcare and consumer industries. More information about TA Associates can be found at www.ta.com.