TIG buys stake in Canadian credit manager: Reuters

TIG Advisors on Wednesday said it has bought a piece of Canadian mortgage investor Romspen Investment Corp, marking the first time it has taken a stake in another hedge fund.

Romspen, a Toronto-based credit manager, invests $2.5 billion in assets, providing first mortgage bridge lending to commercial real estate projects in North America.

“We invested with Romspen because of their experienced executive team, acute focus on risk mitigation and strong track record of performance that is uncorrelated to public markets,” TIG’s president Spiros Maliagros said in a statement. No price was disclosed.

Romspen’s management team, led by Mark Hilson and Wes Roitman, will continue to run the firm.

New York-based TIG, founded nearly 40 years ago by Carl Tiedemann, oversees roughly US$3 billion in assets and plans on making more investments in other alternative managers.

Sandler O’Neill was TIG’s financial advisor.

Firms like Dyal Capital Partners, Affiliated Managers Group and Blackstone Group have created lucrative businesses for themselves by buying minority stakes in investment firms at a time when the funds’ founders may be looking to cash out or expand.

At the same time as TIG made its investment, Kudu Investment Management made an investment in TIG, whose size could not be obtained, that adds permanent and passive capital for TIG to expand and diversify.

(Reporting by Svea Herbst-Bayliss; Editing by Bill Berkrot)