NEW YORK, September 3, -- Castle Harlan, Inc., the New York merchant bank, announced today its sponsorship of Matrix Global Investment, Inc., a new company that is being capitalized at $60 million to invest in money management firms.
Castle Harlan holds a majority stake in the new company. The principals of Matrix, Clinton J. Kendrick, chairman and chief executive officer, and R. Alastair Short, president and chief operating officer, also hold substantial equity stakes.
David H. Chow, a managing director of Castle Harlan, said that "Matrix's strategy is to build a global investment management and asset-gathering operation by investing in money management firms with non-overlapping investment styles. Over time, this will create a broadly diversified product line.
"In addition," he said, "we have great confidence in Matrix's principals and their ability to leverage their historic operating success and industry contacts to identify attractive opportunities for investment and to help all the Matrix firms grow, individually and collectively."
Messrs. Kendrick and Short have been partners in the money management business for the past year. Mr. Kendrick is former president of Alliance Capital Management Corp. and a co-founder, with Lewis Ranieri, of Hyperion Capital Management. Mr. Short was the co-founder of Apex Capital Partners, a private equity investment firm whose specialty was acquiring operating businesses jointly with management.
Mr. Kendrick said that Matrix targets high quality investment management firms and provides a marketing, sales and distribution company at the parent-company level to help them grow. Each of the firms, he said, has a minimum of $500 million in assets under management. They will operate autonomously and offer a comprehensive range of non-overlapping investment styles, both global and domestic.
Mr. Kendrick said he and Mr. Short welcome Castle Harlan's support.
"These are highly sophisticated investors," he said, "with an enviable record of success in private equity investment. They also have a deep understanding of the investment management business by virtue of their very successful acquisition and strategic development of Delaware Management Holdings, which they purchased in 1988 and grew to over $26 billion in assets under management. Castle Harlan's support as our partner is an invaluable asset for Matrix."
Mr. Kendrick has spent 30 years in the investment management business. He was with Alliance Capital for 15 years and served as the firm's president for 10. After Alliance, he co-founded Hyperion Capital and built it to more than $2.5 billion under management in less than three years.
Prior to forming Matrix with Mr. Short, Mr. Kendrick was a managing director of Lehman Brothers and COO of the firm's Global Asset Management division.
While with Apex, Mr. Short built up a record of successful investments as principal in a variety of businesses. Before he co-founded Apex in 1988, Mr. Short was with Quadrex Securities, where he helped to establish the mergers and acquisitions and leveraged buyout groups. Earlier, he had practiced law with Rogers & Wells, focusing on securities and corporate law.
Castle Harlan's investment in Matrix was made by Castle Harlan Partners III, a private equity limited partnership that closed earlier this year with $630 million in commitments from public and private pension funds, college endowments, foundations and individual investors.
Castle Harlan was founded in 1987 by John K. Castle, former president and CEO of Donaldson, Lufkin & Jenrette, the investment banking firm, and a pioneer in private equity partnership investments, and Leonard M. Harlan, founder and former chairman of The Harlan Company, a real estate investment banking and financial advisory firm.
Since the firm's inception, it has completed acquisitions valued at more than $3 billion.