New York Life Investments has signed an agreement to acquire a majority stake in Private Advisors, an alternative investment firm based in Richmond, Virginia. 

With USD3.9bn in assets under management, the firm has a 13 plus year track record across a range of fund of funds, including the firm's flagship low volatility multi-strategy capability, launched in 1998.

"Private Advisors has a long history of delivering risk-adjusted investment returns, with a strong focus on capital preservation. The firm has a well-defined investment process that incorporates investing in alternative investment managers with proven track records," says John Kim, president and chief executive officer of New York Life Investments.

Private Advisors is led by founder and managing partner Louis Moelchert, Jr, who prior to the creation of the firm managed the endowment for the University of Richmond for over 25 years. The endowment began investing in alternatives in the early 1980s.

"This is a great opportunity for our clients and our firm. New York Life Investments' multi-boutique investment structure will enable Private Advisors to preserve its long-standing investment philosophy, its experienced investment team and capabilities - all while benefiting from the resources of one of the most reputable financial institutions in the world," says Moelchert.

At closing, New York Life Investments will acquire a 60 per cent ownership interest in Private Advisors and Private Advisors' equity holders will retain the remaining 40 per cent. A significant portion of the equity holders' proceeds will be re-invested in Private Advisors' funds alongside its clients.

"We believe this structure maintains the alignment of interests between our management and our clients, it encourages employee retention, and places an emphasis on the long-term success of the firm," says Moelchert. 

Private Advisors complements New York Life Investments' alternative capabilities in private equity and real estate as well as its suite of equity and fixed income strategies.

The parties expect to close the deal on or about 31 December 2010.