New York Life Investments has agreed to acquire a majority stake in Private Advisors LLC, a fund of hedge funds manager in Richmond, Va.
Private Advisors, which has assets of $3.9 billion, is led by founder and managing partner Louis Moelchert Jr., who managed the endowment for the University of Richmond for more than 25 years before starting Private Advisors.
The endowment first put money to work into alternative investments in the early 1980s.
John Kim, the president and chief executive officer of New York Life Investments, a unit of New York Life Insurance Co., said in a press release last week: "Private Advisors has a long history of delivering risk-adjusted investment returns, with a strong focus on capital preservation. The firm has a well-defined investment process that incorporates investing in alternative investment managers with proven track records."
The deal is another example of consolidation in the hedge fund industry as the very largest firms continue to attract the bulk of new money.
Industry observers say pension funds and endowments feel more comfortable investing alongside their peers in firms backed by large financial institutions.
In the second quarter, nearly all of the $23 billion of new money that entered the industry went to firms with more than $5 billion of assets under management, according to data from Hedge Fund Research.
These firms now control about 60% of the total industry capital.
