PRINT THIS PAGE Paine & Partners backs MBO of Capital Z's hedge fund sponsorship business25/01/2008. Source: AltAssets. 
San Francisco and New York-based private equity firm Paine & Partners (formerly Fox Paine) has backed an MBO of the hedge fund sponsorship business from Capital Z Investment Partners. Financial terms of the transaction were not disclosed. As part of the deal, Capital Z's hedge fund management team and Paine & Partners will purchase the minority ownership hedge fund management company and general partnership interests held by the limited partners in two of Capital Z's alternative investment sponsorship funds. As a result, a new alternative asset management business, Capital Z Asset Management, will be established.
A new alternative asset management business, Capital Z Asset Management, will be established to continue and expand the hedge fund sponsorship activities that Capital Z began in 1998.
The Capital Z management team will own a significant stake of Capital Z Alternative Asset Management and will have representation on its board of directors. Laurence Cheng, founder and CEO of Capital Z Investment Partners, will serve as chairman of the board of Capital Z Asset Management.
W Dexter Paine III, co-founder of Paine & Partners, said, 'Capital Z has been an innovator in the area of alternative asset management and the Capital Z team, led by Laurence Cheng, have proven themselves to have been visionaries. We were attracted to the unique sponsorship model that Laurence and his team have honed, which ensures that the entrepreneurial spirit of the hedge fund managers remains intact - allowing them to build their own businesses with guidance and patient support from Capital Z.'
Cheng added, 'We believe our new company represents the first vehicle of its kind - an entity dedicated not only to holding interests in management companies and general partners of hedge funds, but to providing a full range of hedge fund products. We acknowledge the increasing bifurcation in the alternative asset marketplace and strive to level the playing field for talented emerging hedge fund managers.'
Paine & Partners focuses on MBOs, public-to-private transactions and growth capital investments. Together with the name change the firm has also announced a number of promotions. Brian G Block, Christopher M Ruettgers and Angelos J Dassios, all previously principals, have been named directors of the firm. Robert M Meyer, VP of finance, has been promoted to CFO, while former CFO, Amy E Ghisletta, has been named COO.
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