With Lincoln Investments’ purchase of the $1.2 billion Omaha investment firm Berkshire Hathaways, the investment arm of the Omaha-based conglomerate, the hedge fund giant will be able to expand its investment arm and expand into new markets.
The deal is the latest in a series of deals for Berkshire Hathaws, which recently invested in the world’s largest private equity firm, Fidelity Investments.
The acquisition of Lincoln is the second acquisition Lincoln has made in the last few years.
In May, Lincoln announced it was buying the Boston-based investment firm SAC Capital, which manages about $8.6 billion.
That deal, also announced last month, is valued at about $7.5 billion.
The Omaha-headquartered Lincoln also bought the Los Angeles-based private equity group the Evercore Group in June.
The Lincoln deal comes amid a shift in the hedge funds’ approach to private equity investing.
In the last two years, hedge funds have begun to focus more on private equity-specific investments, said Ben Horowitz, the executive director of hedge fund research firm Fidelity.
“The big question now is what will happen to the other fund that does hedge fund private equity and does have the kind of business expertise and reputation that Lincoln does,” he said.
The Omaha company, which is also a subsidiary of Berkshire Hathaw, will become a wholly owned subsidiary of Lincoln Investments, which will continue to operate under its own name. “
It’s a big deal for Lincoln, but it’s also a big story for Berkshire, and they’ll be able more easily access those markets where Lincoln can bring a new perspective on how to invest.”
The Omaha company, which is also a subsidiary of Berkshire Hathaw, will become a wholly owned subsidiary of Lincoln Investments, which will continue to operate under its own name.
It will have a total market value of $1 billion and will invest in about 30 companies, including tech companies such as Google, Apple and Facebook.
Lincoln will also own the Lincoln-owned assets of Lincoln Partners, which provides private equity financing to hedge funds and other companies.
The investment arm will be called Lincoln Investment Partners, and it will be headed by former hedge fund executive, John Kull, who will join the board.
“We are thrilled that Lincoln has chosen to acquire Berkshire Hathams investment arm, which brings Lincoln’s global private equity expertise to bear on the global private-equity markets,” said John J. Bohnen, the president of Lincoln, in a statement.
“With its extensive portfolio of investments, Lincoln provides the hedge-fund industry with a world-class asset management company to help hedge funds manage their money.
The partnership with Lincoln will provide Lincoln with unparalleled access to the private-private equity market, providing them with the expertise they need to make smarter and more informed investment decisions.”
Lincoln’s board includes former hedge funds executive and billionaire investor Warren Buffett, who has said he wants to see hedge funds invest in private companies.
Buffett has been critical of hedge funds that are more focused on making money than investing in companies.
“What we need to be doing in private-public companies is to be more like hedge funds,” Buffett said last month at the New York Stock Exchange.
“I think we’ve got to do that because we’re going to lose our business if we don’t.
So, if we’re not doing it, we’re losing a lot.
I think the only thing that can help us is to have a lot more emphasis on the businesses that are really making money and not getting in trouble with regulators.”