Cambridge Associates to sell minority stake to client Sofina SA

  • Belgian company is third client to invest in firm
  • Agreed to purchase about 20 pct stake
  • Proceeds for shareholder estate planning, recently retired employees

Cambridge Associates will sell a minority stake to Belgian investment company Sofina SA, a client of the Boston consulting and money-management firm.

In a statement to Buyouts, Cambridge said that “the long-standing shareholders of the firm — our co-founders and two families — are working on rebalancing their holdings and on their own estate planning. The investment in Cambridge Associates has been successful for all of them, and they remain shareholders in the firm.

“Proceeds of the transaction will contribute to this portfolio rebalancing and estate planning, and also offer liquidity for recently retired employees of Cambridge Associates.”

Broadhaven Capital Partners advised Cambridge on the transaction, terms of which were not disclosed. Cambridge CEO David Druley told Institutional Investor that Sofina had agreed to buy around 20 percent of the company from its founders and the Rothschild and Hall families, who will all remain minority owners. The families are also clients who previously invested in the firm.

In March 2017, The Wall Street Journal reported that Cambridge’s owners were looking to sell part of their stakes and had hired Broadhaven to run a process. At the time, the paper said, Founders James Bailey and Hunter Lewis owned about 75 percent of the company on an undiluted basis, with most of the rest split between Lord Jacob Rothschild and the Halls of Kansas City, Missouri, owners of Hallmark Cards.

Cambridge had just announced around 50 layoffs, as it worked to expand more into investing clients’ money, with the consulting side of its business being squeezed by competition.

Bailey and Lewis, former Harvard roommates, founded Cambridge Associates in 1973. They started out consulting for endowments, including their alma mater’s, and were early advocates of alternative investments. The firm grew to serve pensions, sovereign-wealth funds, insurers and private clients.

Based in Brussels, Sofina is owned and controlled by the Boël family. The firm takes ownership positions in mainly European companies, both private and listed, and also invests in PE and venture-capital funds.

Action Item: Read Cambridge Associates’ full announcement:

A cyclist rides along the Charles River in Cambridge, Massachusetts, as the fog lifts from the Boston skyline across the river, on Oct. 5, 2005. REUTERS/Brian Snyder