Hedge Fund Focus

Clover Capital manages $2.8 billion in value equity, balanced and fixed-income assets: Transaction expected to be complete by year end

Federated Investors, Inc. (Federated), one of the nation’s largest investment managers announced on September  15th, 2008 its agreement to acquire Clover Capital Management, Inc. (Clover Capital), a n investment manager that specializes in value investing.  The sale is expected to close in the fourth quarter of 2008. 

Federated manages approximately 147 mutual funds and $333.5 billion in assets, and provides comprehensive investment management to more than 5,400 institutions and intermediaries including corporations, government entities, insurance companies, foundations and endowments, banks and broker-dealers.  Clover Capital manages approximately $2.8 billion in assets and provides advisory services to foundations and endowments,  retirement plans and individual investors.

J. Christopher Donahue, President and Chief Executive Officer of Federated, stated:
  “Federated’s ability to manage value-oriented equity products will be enhanced by the  acquisition of Clover Capital, which has shown its value-investing acumen by providing strong  returns for its clients for more than 20 years.”

Michael E. Jones,  Chief Executive Officer and Chief Investment Officer of Clover Capital, added:
 ”We believe that an association with Federated will provide a number of benefits to our clients  as we will be able to leverage Federated’s substantial resources and capabilities, while retaining  Clover Capital’s personnel and our client-focused culture.”

The transaction has been approved by the board of directors of Federated Investors, Inc. and shareholders owning a majority interest in Clover Capital and is subject to customary closing conditions. The initial purchase price for the transaction is expected to be approximately $36 million based on current asset levels. The transaction also includes a series of contingent payments, which could total as much as $57 million over the next five years based on growth.

As a result of the strong investment performance of its value investment strategies, Clover Capital’s products have been attractive to institutional and high-net-worth investors. Upon the closing of the transaction, Federated expects to introduce Clover Capital’s investment strategies to all of its distribution channels. In addition, Federate plans to introduce three traditional value-oriented equity mutual funds, which will be managed by the team at Clover Capital.

To view the full related press release, please visit:
http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=109&STORY=/www/story/09-15-2008/0004884724&EDATE