Rumors have swirled that Deutsche Bank, reeling after agreeing to a $7.2 billion settlement with the feds over its handling of mortgage securities in the run-up to the 2008 market collapse, was interested in spinning off its asset management unit as a separate public company.
Taking advantage of the uncertainty at the division, West L.A. investment management firm Aristotle Capital has snagged a group of Deutsche Asset Management defectors, led by Joe Benevento, former chief investment officer for the Americas group, and Owen Fitzpatrick, former head of the U.S. equity platform.
The new group, which is based in New York as Aristotle Atlantic, adds to the firm’s more than $13 billion in assets under management, according to Gary Lisenbee, Aristotle’s co-chief executive and co-chief investment officer.
“We have no agenda to add a specific number of affiliates,” Lisenbee said. “When we come across a talented group like Joe and the Deutsche folks, we feel it’s a great value add for the firm and our investors.”
Benevento said the jump from Deutsche was driven by a desire for more control over operations, and that he and his group were drawn to the Aristotle affiliate model, which allows partners to have the backing of centralized corporate services while remaining somewhat autonomous in terms of investment.
“What attracted us was the ownership culture, which is very much a part of the Aristotle model,” Benevento said. “This is not a decision you make overnight.”
Benevento and Lisenbee said their relationship was cultivated by Aristotle Chairman Rich Hollander, who tapped into his East Coast connections and put the deal together. The Deutsche group has so far brought over about $300 million in assets, and that number is expected to rise going forward, according to Benevento and Lisenbee.
Law Firm Reboots Incubator
Fostering connections with entrepreneurs and early stage companies is a standard business practice for most venture capitalists, many of whom either have ties to or operate standalone incubators and accelerators.
But other industries are moving into this space looking to create early connections with startups, relationships that can pay major dividends down the line.
Stubbs Alderton & Markiles is one such player. The Sherman Oaks law firm has developed a Preccelerator Program, which provides in-house legal advice and mentoring to idea-stage companies, in addition to office space. The firm announced last week that it would double the size of the venture, which launched in 2012, and begin making capital investments in participating startups.
The expansion comes as part of a partnership with Creatv Media founder and Chairman Peter Csathy. Csathy, who’s firm is based in Los Angeles, is joining the program’s board and will lead the outfit’s investment strategy and prospective overseas investments.
Greg Akselrud, a founding partner at the law firm and its head of internet, digital media, and entertainment practice, said the partnership with Csathy made sense given Stubbs Alderton’s shift toward financial investments and other types of offerings more closely associated with the technology industry.
“Late last year we started thinking about how to take this thing to the next level, and we knew Peter and his standing in the industry and thought he’d be the perfect person to bring on board,” Akselrud said. “We plan to bring in more companies, add to the suite of services, and add more mentorship with the goal of getting more investment.”
The program, up to this point, has typically had about five companies a class. Each business works with the firm for three to six months on average. Akselrud said the majority of companies that come through the program are able to secure outside funding. Alumni include Westwood’s Team(You) Inc., an education sector rewards program startup that has raised $600,000; wireless analytics outfit 3Ten8 Inc. of Palo Alto, which has raised $1.6 million; and Santa Monica’s Rally Networks Inc., maker of a wireless phone charger that doubles as an affiliate marketing platform.
Akselrud said there’s no specific dollar amount the firm is looking to invest and that the underlying purpose of the program is to foster long-term success.
“We try to facilitate the growth of these companies as best we can,” he said. “The ultimate goal is to create a platform where we can identify the next great breed of digital media and technology company.”
Houlihan Lokey Pushes IP
Investment banking powerhouse Houlihan Lokey has bolstered its intellectual property advising practice with the acquisition of Black Stone IP, a San Francisco boutique.
Houlihan, based in Century City, said the deal is part of an effort to expand its evaluation capabilities in the IP space.
“Intellectual property is increasingly regarded as an asset class deserving the attention of boards and investors across many industry sectors, and companies are recognizing that significant value exists in these assets,” Jack Berka, Houlihan’s global head of financial advisory services, said in a statement.
Black Stone personnel will join Berka’s team and form a Tech + IP group led by Elvir Causevic and Edmund Fish, former Black Stone chief executive and senior managing director, respectively.
Terms of the deal were not disclosed.
Staff reporter Henry Meier can be reached at [email protected] or (323) 549-5225, ext. 221.
