Activist Hedge Fund Manager Ramius Capital to Acquire the Cowen Group

June 5th, 2009
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Ramius LLC, an activist hedge fund manager, has signed an agreement to purchase boutique investment bank Cowen Group Inc. (NASDAQ: COWN) in a deal that will create a diversified financial services company situated to weather the changing landscape of the financial sector. Under retained Cowen Group Inc. name, the consolidation will leave Ramius shareholders with 71.24 percent stake of the merged company and Cowen with a 28.76 percent stake with a combined Book Value of $450 Million. As part of the deal, Cowen will also agree to purchase from an affiliate of a third party investor of Ramius 50 percent interest of Ramius Fund of Funds. Subject to shareholder approval and regulatory oversight, the deal is expected to be finalized in fourth quarter of 2009.

Founded in 1994 by former Lehman Brothers CEO Peter Cohen, Ramius LLC is a private investment alternative investment firm. The firm offers various alternative investment vehicles for institutional investors including hedge funds, fund of hedge funds, cash management, and real estate funds. At the time of the merger, Ramius had approximately $7.7 billion assets under management. Cohen believes the transaction will provide synergies for both parties and will allow for a stronger, minimally leveraged balance sheet in order to efficiently cope with the changing economic environment. He also quelled shareholder concern by stating firm strategy will be unchanged: “ We remained dedicated to meeting [their] investment objectives and providing client service of the highest quality.” Cohen will serve as CEO and Chairman of the combined company.

Cowen Group Inc is a holding company for investment bank Cowen and Company LLC. The firm was founded in 1918 in New York City and offers a broad range of financial services including investment banking, research, equity sales and trading, and alternative asset management services to institutional investors. Prior to 2006, the firm functioned as a unit of French bank Société Générale. President and CEO, David M. “Greg” Malcom also believes the deal, which was unanimously approved by Cowen shareholders, is a an excellent opportunity for both firms to capture a greater market share by offering a broad range of financial services to an diverse international client base: “This union creates a complementary balance of services and offerings for our respective client bases and allows each firm to maintain business continuity while building a new platform for growth.”

In an increasingly complex financial environment, the economies of scale resulting from consolidation can help benefit both firms in the long run. With opportunity for cross-selling amongst Ramius’ and Cowen’s respective clients, it will be interesting to see whether the newly merged firm will be able to capture these synergies going forward
See Press Release
For Detailed Investor Profiles on these Investors, click below:
Ramius Capital Group
Related People: Jeffrey Smith; Jeffrey Solomon; Mark R. Mitchell; Morgan Stark; Peter Cohen; Thomas Strauss
Related Entities: Cowen Group Inc. (NASDAQ: COWN); Ramius Alternative Investments; Ramius Credit Fund; Ramius Enterprise LP; Ramius Intermediate Fund; Ramius Multi-Strategy Fund; Ramius Value and Opportunity Fund
Related Article Tags: Shareholder Activists, Corporate Raiders and Proxy Battles; Investment Management and Hedge Fund Firm Mergers, Acquisitions, Spin-offs and Transactions

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