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LGL
LIBU
Liberty Life to sell its fund of hedge funds business to Caledonia Investments
and management
Liberty Group Limited
Incorporated in the Republic of South Africa
Registration number: 1957/002788/06
Alpha code: LGL & ISIN code: ZAE000057360
Issuer code: LIBU
Liberty Group Limited to sell its fund of hedge funds business to Caledonia
Investments and management
Liberty Group Limited ("Liberty Life") is pleased to announce that it has
entered into a definitive agreement to sell its fund of hedge funds subsidiary,
Liberty Ermitage Jersey Limited ("LE").
LE is being acquired by a new company to be owned by Caledonia Investments plc
("Caledonia") and LE"s management team.
The transaction is subject to regulatory approvals and is scheduled to close
during the second quarter of 2006.
LE is one of the largest offshore hedge fund management groups based in Europe.
LE manages circa $1.8 billion in 12 funds of hedge funds and $0.6 billion in
money market funds. LE also manages long-only funds which will be acquired by
STANLIB and which do not form part of this transaction. LE"s fund
administration business in Luxembourg is also excluded from the transaction.
The potential total acquisition price is GBP41.1 million, payable in cash, and
is split between an initial consideration of GBP35.1 million and up to a further
GBP6.0 million payable over the next three years, dependent upon the level of
assets managed in that period by Ermitage.
As part of the transaction, Liberty Life will also realise excess capital in the
balance sheet of Liberty Ermitage, which is currently invested in Liberty
Ermitage funds. GBP24.4 million will be realised at completion, with a further
amount of approximately GBP14.0 million receivable in mid 2007.
Myles Ruck, Chief Executive of Liberty Life, said, "I am pleased that we have
been able to reach agreement with Caledonia and the management team. LE"s
business has now achieved critical mass, built around a robust and stable
technology platform, a highly skilled research team and a proven investment
process. Caledonia"s strong reputation, understanding of the asset management
sector and willingness to invest for the long term makes them an ideal partner
for the senior management team of LE. Liberty Life will continue to be a
client of the business and we look forward to seeing the business continue to
flourish on an independent basis."
Ian Cadby, CEO of LE, said "I am delighted to be working with Caledonia, who
will enable us to continue our organic growth strategy, focusing on our core
capabilities of managing fund of funds investments and offering a broader and
stronger product range to our clients in the institutional and retail markets.
Liberty Life has been an excellent parent for the business and enabled us to
create a successful and well-established specialist fund of hedge funds
organisation."
"I am confident that the management team and staff of LE have the required blend
of experience, track record and determination to deliver on our strategy and to
develop the business further as one of the leading groups in the fund of hedge
funds sector."
About Liberty Life
Liberty Life is the third largest life insurance company in South Africa with a
market capitalisation of R23.2 billion. Liberty Life is active in the life
insurance and asset management sectors.
About Caledonia
Caledonia is a UK investment trust company, listed on the London Stock Exchange.
The Company aims to achieve a long term shareholder return in excess of the FTSE
All-Share Total Return while maintaining a progressive annual dividend.
Caledonia has established a reputation as a supportive and constructive long
term investor, with considerable experience in the investment management sector.
Liberty Life was advised by Hawkpoint Partners and Norton Rose in this
transaction.
Liberty Life Press contacts:
Mandy Denton
Telephone +27 11 408 2621
Liberty Life Investor Relations:
Stewart Rider
Telephone +27 11 408 3260
Hawkpoint Partners
Hugh Elwes + 44 20 7665 4687
Sponsor
Merrill Lynch South Africa (Pty) Limited
Date: 09/03/2006 11:00:10 AM Produced by the JSE SENS Department
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