Blackstone Group has put First Eagle Investment Management up for sale for more than $4bn in an attempt to offload a large stake that the US private equity group has owned for a decade.
Blackstone and Corsair Capital, which acquired First Eagle for $4bn in 2015, have hired Morgan Stanley to lead the sale process, said people briefed on the matter.
The two buyout groups are seeking to capitalise on a wave of takeover activity in the asset management sector as PE buyers and financial services firms pile into fee-based financial businesses.
First Eagle generates about $500mn of annual earnings before interest, taxes, depreciation and amortisation, the people said. The business is expected to fetch a valuation of more than $4bn, they added.
Blackstone and Corsair financed their acquisition with leverage and have pulled dividends from First Eagle, meaning a sale price of more than $4bn would yield a positive, but unexceptional, return.
The 161-year-old company, once called Arnhold and S. Bleichroeder Holdings, was founded in Dresden to finance a range of local businesses including brewers.
When First Eagle’s founding family escaped Nazi Germany and moved to New York in the late 1930s, they built a large presence on Wall Street. The firm is best known as an early training ground for investor George Soros.
In 2007, the Arnhold family sold a minority equity stake to private equity firm TA Associates and eventually renamed the company First Eagle. Blackstone and Corsair Capital took control of the company in a 2015 deal.
First Eagle’s sale to Blackstone and Corsair was part of an early surge in private equity takeovers of asset managers and independent investment advisory groups, which has caused industry valuations to soar.
Over the past year, PE firms have struck large deals. CVC is in the process of delisting UK asset manager Hargreaves Lansdown for about $7bn while in the US investment advisers Fisher Investments and Creative Planning have both sold minority equity stakes to private equity investors at valuations exceeding $12bn.
First Eagle has grown only modestly under Blackstone and Corsair’s ownership, with its assets climbing about 50 per cent since 2015. But it has recently struck acquisitions in private credit, including buying specialist investors.
First Eagle said the company did not comment on rumours or speculation. Blackstone declined to comment. Corsair did not immediately respond to emails seeking comment.