Blackstone Group has announced the sale of its stake in First Eagle Investment Management, a move that values the firm at over $4 billion. This decision to offload the 161-year-old asset management company comes as private equity (PE) firms seek to capitalize on a surge in takeover activity within the asset management sector, where both PE buyers and financial services firms are increasingly targeting fee-based businesses.
Blackstone, along with Corsair Capital, which jointly acquired First Eagle for $4 billion in 2015, has hired Morgan Stanley to manage the sale process, according to sources familiar with the matter. The sale aims to tap into the current momentum in the asset management sector, where valuations have soared due to a wave of private equity buyouts.
Under Blackstone and Corsair’s ownership, First Eagle, which generates around $500 million in annual earnings before interest, taxes, depreciation, and amortization (EBITDA), has seen a modest 50% increase in assets since 2015. While the company’s growth has been moderate, it has recently expanded its portfolio with acquisitions in private credit, including the purchase of specialist investors. Despite the relatively modest increase in its assets, First Eagle’s valuation is expected to exceed $4 billion, offering a positive, though not exceptional, return for the buyout groups.
First Eagle, founded as Arnhold and S. Bleichroeder Holdings in Dresden in 1854, has a long history rooted in financing local businesses, including brewers. After fleeing Nazi Germany in the late 1930s, the firm’s founding family settled in New York and built a significant presence on Wall Street. The company later became known for training investor George Soros. In 2007, the Arnhold family sold a minority stake to private equity firm TA Associates, and the company was subsequently renamed First Eagle.
The sale of First Eagle by Blackstone and Corsair is part of an ongoing trend of private equity acquisitions within the asset management industry, with similar high-profile deals such as CVC’s takeover of UK asset manager Hargreaves Lansdown for approximately $7 billion. Other recent transactions include Fisher Investments and Creative Planning in the US, both of which saw PE firms purchase minority stakes at valuations exceeding $12 billion.
While First Eagle has grown under its current owners, its sale represents another chapter in the rising interest of private equity in the asset management space. Blackstone and Corsair’s decision to sell comes as the sector’s valuations continue to climb, with large-scale deals reshaping the financial services landscape. However, the deal could also signal a shift as private equity firms look to profit from the robust market for asset managers.
