Lansdowne Partners has agreed to buy UK investment boutique Crux Asset Management, a move that cements its evolution in recent years from one of Europe’s top hedge funds into a mainstream asset manager.
The deal for Crux, which runs $1.1bn largely for UK wealth management clients, illustrates how rising costs and shrinking margins are forcing groups to tap new strategies and expand distribution channels.
The acquisition is the first in Lansdowne’s 25-year history. Founded in 1998 by Sir Paul Ruddock and Steven Heinz, Lansdowne was once regarded as the gold standard in equity investing, but its assets have shrivelled from more than $21bn five years ago to $7bn today.
Crux’s founder Richard Pease, previously a star manager at New Star Asset Management and then Henderson Group before setting up the company in 2015, will retire following the deal. The management of his two funds will pass to Lansdowne partner Daniel Avigad, who runs the firm’s European long-only strategy. Financial terms of the deal were not disclosed.
Lansdowne was for years synonymous with its UK equity hedge fund, later renamed as the Lansdowne Developed Markets fund. It was managed by Pete Davies and Stuart Roden, and had a strong long-term record.
When Lansdowne sold a 19 per cent stake in the business to Morgan Stanley Investment Management in 2006, the firm had more than $12bn in assets. That had grown to $21bn by the time Roden retired in 2018.
But in recent years its hedge fund business has floundered as the more than decade-long bull run since the financial crisis made stock picking — as well as shorting shares — much tougher.
In 2020, Lansdowne said it would shut its flagship developed markets fund, run by Davies and Jonathon Regis, after a period of poor performance.
Since then the firm has been predominantly focused on long-only investing, which charges lower fees. In early 2021, Brian Heyworth joined Lansdowne from HSBC Asset Management as co-managing partner to help diversify the business beyond its institutional client base of pension funds and endowments.
Last year, Crux sold a minority stake to Stephens, an independent financial services company headquartered in Little Rock, Arkansas.
Lansdowne will seek to tap Crux’s client relationships and partnership with Stephens to target the wealth management market in the UK and the US.