The sale, led by founders Kevin Cooper and Martin Wheeler (pictured), is due to complete in October, three and a half years after they sold a 51% stake to quoted specialist debt asset manager ICG and agreed an option to cede full control.
The acquisition price for the 49% outstanding interest is believed to have been linked to the amount of capital raised by the Longbow partners and assets under management.
Since 2011 ICG-Longbow has raised more than £1.3bn across four funds, and invested £1.1bn into the UK market. Originally a mezzanine specialist, Cooper and Wheeler expanded the business into senior lending two years ago. That now accounts for over a third of fund commitments.
In a statement this morning, ICG said it has “put in place appropriate long-term incentive plans for ICG-Longbow’s management and portfolio team, ensuring long term alignment of interests with the ICG Group and fund investors”.
The partners will collect £13m in October and an estimated deferred balance of £24m in 2016, depending on a formula and performance. A spokeswoman said the long-term incentive plan was for “the medium-term” and goes beyond 2016.
The business’s vehicles include the £700m ICG-Longbow UK real Estate Debt Investment III that provides whole loans and mezzanine debt and the £400m ICG Senior Debt Partners Fund, with ICG co-investing £150m since 2011. The company said it is due to launch new senior debt and a fourth whole loan and mezzanine loan funds within the next six months
Christophe Evain, chief executive officer of ICG said: “ICG’s business model is underpinned by launching and developing new strategies that use the best of our investment expertise, specialist local knowledge and relationships. The 51% acquisition of ICG-Longbow in 2011 initiated the acceleration of this strategy… the potential of the business is even greater today than it was in 2011.”
Kevin Cooper, joint managing partner of ICG-Longbow said: “The acquisition validates the strength of the business that has been built, the depth of talent in the team and the scale of the opportunity going forward. We remain excited by the market opportunity and the potential for ICG-Longbow to continue to grow its reputation, amongst investors and sponsors, as a leading provider of real estate capital in the Europe.”
In addition to Cooper and Wheeler the other partners are: Graeme Troll, Trevor Homes, Phillip Archer, Julian Naylor, Ralph Charlwood and Matthew Main.