Private equity fund Madison Dearborn has made the biggest-ever play for an asset management firm, offering $5.75 billion to buy out Chicago-based Nuveen Investments. The $65-per-share offer—a 20% premium over Nuveen's closing price yesterday—signals the growing demand for cash-rich money-management firms as buyout targets.
Acquisitions like Nuveen give private equity easy access to cash to finance debts. Commerzbank AG's Jupiter fund division went earlier this year for £740 million ($1.48 billion), and Hellman & Friedman grabbed Gartmore Investment Management last year. And as the Dow climbs, asset management targets become even more attractive. Nuveen manages $53 billion in closed-end funds; its first-quarter net income rose 17%.