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Hedge fund deal\'s unique feature?


Date: Friday, January 30, 2009
Author: Breakingviews.com

The deals for hedge funds these days aren't nearly as gripping as they were a year or so ago, when people were speculating which funds would go public. The deals these days tend to be of the bailout--take my assets, please!--variety. At least one appears to have involved no cash transferat all.

Breakingviews notes the deal Stark & Roth struck to buy Deephaven Capital Management. It gets $2 billion in capital for just $7.2 billion. But the article notes an interesting earn-out feature. If the investors stick with the new company and Stark can somehow get the funds above the high water mark, then the payments could rise all the way up to $45 million.


Complete story:
http://www.breakingviews.com/2009/01/27/Hedge%20fund%20MandA.aspx?sg=nytimes