The U.S. private equity investor FLAG Capital Management announced today that it will acquire Hong Kong-based Squadron Capital, which manages $1.5 million in assets, PRNewswire reported. Its acquisition of the private equity firm will give FLAG a presence in Asia, increasing its total assets under management to $6 billion.
FLAG was founded in 1994 and manages $4.5 billion, according to Reuters, which also reported it will be the first acquisition of a fund of funds in Asia's private equity industry.
A fund of funds is a mutual fund that allows for investment in other mutual funds; a practice sometimes referred to as multi-management, according to Investopedia.
A spokesperson for FLAG said the acquisition, from Search Investment Group, will help the firm to "more effectively deliver global solutions in private equity, venture capital, natural resources and real estate," PR Newswire reported.
"Squadron has one of the most experienced private equity fund of funds teams in Asia, and we are excited to be joining such a terrific organization. Together we believe we can grow our combined business rapidly, benefiting from highly complementary relationships and business practices," David Pierce, Chief Executive Officer of Squadron Capital, who will become a FLAG partner, commented.
The Squadron Capital team has been managing Asian private equity funds since 1989.
"I am proud of the success of Squadron Capital and its growth into a premier Asian private equity investment firm," said Robert Miller, Chairman of Search Investment Group, as reported in PRNewswire.
The deal is expected to close around December 31.
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