Bridge Investment Group Holdings Inc. (NYSE: BRDG) has announced a definitive agreement to acquire the business of Newbury Partners LLC, a leading investment manager specializing in private equity secondaries. This strategic all-cash transaction, valued at $320.1 million, marks a significant diversification for Bridge, enabling them to tap into the rapidly growing private equity secondaries market and broaden their client base. The acquisition of Newbury Partners is poised to create a combined entity with approximately $48.5 billion in assets under management (AUM), strengthening Bridge’s position in the alternative investment landscape.
This acquisition represents a calculated move by Bridge Investment Group to capitalize on the expanding opportunities within alternative investments, particularly in the private equity secondaries sector. Newbury Partners, established in 2006, brings to the table a robust platform with over $6.2 billion of investor capital raised across five dedicated funds. Their expertise lies in acquiring limited partnership interests in established buyout, growth equity, and venture capital funds through secondary transactions. With a portfolio encompassing over 500 underlying interests and a strong track record of investment performance, Newbury Partners is a recognized leader in the secondaries market.
The strategic rationale behind acquiring Newbury Partners is multifaceted. Firstly, it provides Bridge Investment Group with immediate access to the burgeoning private equity secondaries market. This market is experiencing accelerated demand as investors increasingly seek liquidity solutions and portfolio rebalancing opportunities. Secondly, Newbury Partners‘ specialized expertise in direct sourcing and middle-market focus aligns well with Bridge’s own investment philosophy in real estate. This synergy is expected to drive attractive risk-adjusted returns for the combined entity. Furthermore, the acquisition significantly diversifies Bridge’s product offerings and expands its institutional client base, with minimal overlap between the investor networks of Bridge and Newbury Partners.
According to Robert Morse, Executive Chairman of Bridge, “The acquisition of Newbury Partners is a natural next step in thoughtfully expanding Bridge’s investment platform and capitalizing on a value-enhancing growth opportunity. As investors’ allocations to alternative investments grow, we believe growth in the secondaries market will also accelerate.” This statement underscores the strategic foresight behind the acquisition, positioning Bridge to benefit from the anticipated growth in alternative investments and the secondaries market specifically.
Jonathan Slager, CEO of Bridge, further highlighted the financial benefits, stating, “This acquisition is expected to be immediately accretive to Bridge’s core earnings metrics. We see significant near- and long-term growth opportunities to further enhance Bridge’s fee related earnings.” The immediate accretive nature of the transaction, coupled with long-term growth prospects, makes the acquisition of Newbury Partners a financially sound decision for Bridge Investment Group.
Newbury Partners, under the continued leadership of its long-standing management team, including Managing Partner and Founder Richard Lichter, will maintain its headquarters in Stamford, Conn. Lichter expressed enthusiasm about the partnership, stating, “The opportunity in the secondaries market is as compelling as ever. We are excited about the common vision and fit between Bridge and Newbury Partners and believe strongly that the partnership will accelerate our growth within both our existing strategy and adjacent secondaries opportunities. Bridge has the platform to support our growth, and is the natural next step for Newbury. I am confident that this transaction will position Newbury Partners and Bridge for shared success, and we look forward to working closely with the entire Bridge team to realize the benefits of this complementary combination.”
To finance the acquisition, Bridge Investment Group has secured $150 million through a note purchase agreement, issuing a combination of seven-year and ten-year notes at competitive interest rates. Additionally, the company has increased its Senior Secured Credit Facility to $225 million, providing ample financial flexibility for the transaction and future growth.
The acquisition is anticipated to close in the first half of 2023, subject to customary closing conditions, including regulatory and investor approvals. The successful completion of this transaction will solidify Bridge Investment Group’s position as a diversified alternative investment manager, with Newbury Partners playing a crucial role in their expansion into the lucrative private equity secondaries market.
This strategic acquisition of Newbury Partners by Bridge Investment Group is poised to create significant value for both organizations and their investors. By combining Bridge’s established real estate investment platform with Newbury Partners’ expertise in private equity secondaries, the combined entity is well-positioned to capitalize on the evolving landscape of alternative investments and deliver compelling returns in the years to come.
