US alternative asset manager The Carlyle publicly traded partnership has purchased a 55% stake in New York based commodities investment manager, Vermillion Asset Management, for an undisclosed sum.
Carlyle managing director and head of global market strategies Mitch Petrick said acquisition of majority stake in Vermillion is an important addition to its GMS platform.
"Vermillion employs a liquid, relative-value, low volatility approach to trading both physical commodities and their derivatives to produce positive, uncorrelated returns," Petrick added.
As per terms of the deal, Vermillion will act as Carlyle’s exclusive commodities trading platform and Gilbert and Nygaard will continue in their current roles as co-chief investment officers, managing investments and day-to-day operations.
Carlyle acquired the ownership stake in exchange for cash and performance based contingent payments payable over five and a quarter years.
Under the terms of the agreement, Carlyle will issue principals up to 1,439,788 of partnership units to Vermillion, over a four and a quarter-year period, if the latter reaches certain performance targets.
Vermillion, which oversees three commodities focused strategies, including relative value, enhanced index and long-biased physical commodities, was set up in 2005.
Sandler O’Neill Partners, Katten Muchin Rosenman offered financial and legal advice to Vermillion, while Simpson Thacher & Bartlett served as legal advisor to Carlyle.
As of 30 June 2012, Carlyle had $156bn of assets under management in 99 funds and 63 fund of fund vehicles, and the firm invests in Africa, Asia, Australia, Europe, the Middle East, North America and South America.