Channel Capital brings ownership back to management with backing from Kudu

Australian investment manager Channel Capital is repurchasing a minority equity stake in the business from Highbury Partnership.

Channel will carry out the management buyout through investment from Kudu Investment Management.

In 2017, Highbury invested about $15m in Channel and acquired a minority stake in the business.

New York-based Kudu will not only offer funding for the stake buyout but also additional capital for the firm.

The buyout will provide Channel’s employee shareholders with a greater share of the business.

In return for the financing, Kudu will secure a passive, minority holding in the business. The deal marks Kudu’s entry into the Australian market.

The deal, whose financial details were not revealed, is expected to close this month.

Channel offers incubation, operations, distribution, marketing and responsible entity services to investment managers in Australia and New Zealand.

It employs 27 people across Sydney, Brisbane and Melbourne.

Channel co-founder and managing director Glen Holding said: “While the business has prospered in partnership with Highbury, we’ve reached the next level of growth, requiring a renewed strategy to both consolidate and capitalise on what we’ve built.

“Partnering with Kudu will greatly enhance our ability to pursue larger growth opportunities both within and outside of Australia.”

Kudu currently has 14 affiliated firms including Channel. The firm offers permanent capital solutions to asset and wealth managers and is backed by White Mountains Insurance Group.

Commenting on the development, Kudu chairman and managing partner Charles Ruffel said: “As our first transaction in Australia, one of the world’s largest pension markets, we jumped at the chance to support Channel in achieving its full potential.

“Channel’s leadership and strong focus on investor outcomes permeate the organisation, and we look forward to a long and fruitful working relationship in Australia and globally.”

Earlier this year, Kudu invested in Sequoia Financial Group and Creation Investments Capital Management.