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Wells Fargo Asset Management makes a strategic investment in The Rock Creek Group

Tuesday, December 18, 2012
Opalesque Industry Update - Wells Fargo Asset Management (WFAM) today announced that it had acquired a minority ownership stake in privately held The Rock Creek Group (Rock Creek), a Washington DC-based fund of hedge funds firm with approximately US$7 billion in assets under management. The financial terms of the transaction were not disclosed.

Rock Creek provides commingled and customized multi-manager alternatives and long-only investment solutions to institutional clients. The firm designs and implements customized fund of hedge funds and emerging market portfolios through top-down asset allocation and manager selection, leveraging Rock Creek’s sophisticated, proprietary analytics platform Rock Creek Solutions.

Rock Creek was established in 2002 by Afsaneh Beschloss, who serves as President and Chief Executive Officer of the firm. Previously, Beschloss was the Treasurer and Chief Investment Officer of the World Bank, responsible for managing US$65 billion in assets and a $30 billion funding strategy, as well as US$160 billion in derivatives and structured products. In this position, she was instrumental in developing the World Bank’s portfolio of alternative investments and private equity investments.

“We are pleased to be partnering with one of the world’s leading and most respected diversified financial services firms,” Beschloss said. “We believe this strategic partnership with Wells Fargo Asset Management will further enhance our ability to offer industry leading solutions and services to our clients, while maintaining our corporate culture and institutional investment process.”

WFAM is making this investment through the Affiliated Managers Division, which is headed by Tom Hoops and employs a multi-boutique asset management model. The 50-member Rock Creek team will remain independent with no change in its structure, investment philosophy or process, team and investment committee composition, or location; all day-to-day management will reside with the current Rock Creek team, which will continue to be led by Beschloss.

WFAM will take a minority ownership stake, with the Rock Creek management team and employees having a majority equity stake in the firm. This partnership further increases the long-term alignment of interests between Rock Creek and its clients as it involves a broadening of the equity ownership among Rock Creek’s team. WFAM may acquire additional ownership interests in Rock Creek through long-term put and call arrangements in subsequent years, subject to customary conditions.

Michael Niedermeyer, Chief Executive Officer of Wells Fargo Asset Management, said, “We are very excited to be partnering with The Rock Creek Group, a well-respected and growing global investment firm with an outstanding reputation in the hedge fund industry. Our clients have expressed their desire for increased alternative investment solutions, and this partnership allows us to meet those needs. Rock Creek’s expertise across asset classes and in asset allocation is complemented by their strong portfolio transparency, commitment to risk management, and enhanced reporting and analytics—capabilities that not only serve their clients well but also closely align with our philosophy and culture."

Lazard acted as financial advisor to Rock Creek on the transaction and Sullivan & Cromwell LLP acted as legal counsel to Rock Creek and K&L Gates LLP acted as legal counsel to Wells Fargo Asset Management.

(press release)

About Wells Fargo Asset Management
With more than US$450 billion in assets under management as of September 30, 2012, Wells Fargo Asset Management (WFAM) has over 35 autonomous investment teams with specialized expertise and proven processes; 1,700 dedicated team members, including more than 500 investment professionals; and a global reach with offices and clients around the world. Wells Fargo Asset Management comprises Wells Capital Management, Wells Fargo Funds Management, LLC (advisor to the Wells Fargo Advantage Funds), and the Affiliated Managers Division which includes several other boutique investment managers, including ECM Asset Management, Ltd., stable-value manager Galliard Capital Management, Inc., and quantitative manager Golden Capital Management, LLC.

Wells Fargo & Company is a nationwide, diversified, community-based financial services company with $1.4 trillion in assets. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, insurance, investments, mortgage, and consumer and commercial finance through more than 9,000 stores, 12,000 ATMs, the Internet (wellsfargo.com), and has offices in more than 35 countries to support the bank’s customers who conduct business in the global economy. With more than 265,000 team members, Wells Fargo serves one in three households in the United States. Wells Fargo was ranked No. 26 on Fortune’s 2012 rankings of America’s largest corporations. Wells Fargo’s vision is to satisfy all our customers’ financial needs and help them succeed financially.

About The Rock Creek Group
The Rock Creek Group (Rock Creek) is a leading investment and advisory firm focused on investing in multi-manager portfolios of alternative investments as well as in emerging markets. It is one of the largest fund of hedge funds in the US with 100% institutional assets. Rock Creek’s investors include premier institutional investors including pension plans, sovereign wealth funds, endowments, and foundations. It uses a sophisticated internally-developed Rock Creek Solutions platform to advise clients and to build portfolios that create long-term value. The Rock Creek Group was founded by Afsaneh Beschloss who was the Treasurer and Chief Investment Officer of the World Bank. Rock Creek manages more than $7 billion and approximately three quarters of assets are in customized portfolios to meet specific client objectives.

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