Carlyle Group, a US-based private equity firm, has agreed to purchase the management contracts on $5.1bn in CLO and other credit assets from Stanfield Capital Partners, a New York-based fixed income asset manager.
The $5.1bn transaction consists of $4.2bn in CLOs and $950m of managed account assets, all of which are invested primarily in non-investment grade corporate loans.
Carlyle Group has said that the transaction, part of its broader strategy to expand the scope and depth of its global credit alternatives business, would increase credit AUM to $18.1bn from its current $13bn.
Mitch Petrick, managing director and head of the global credit alternatives and capital markets group at Carlyle, said: “Scale is critical to the CLO business. With this purchase, Carlyle would become one of the world’s largest structured credit managers and an industry consolidator. As we grow and expand our credit alternatives business we will continue to look for additional opportunities to enhance the scale and diversity of our product offerings.”
Dan Baldwin, CEO of Stanfield Capital Partners, said: “The decision to sell your business is a very difficult one to make. However, we believe the marketplace for credit managers is consolidating, as investors in credit place their money with firms that possess the broad array of resources found at large global asset managers. We chose to sell to Carlyle because they not only have a strong investment platform, but possess a comprehensive infrastructure focused on risk management and client service.”
Berkshire Capital Securities served as adviser to Stanfield Capital Partners.
The transaction is subject to investor consent and is expected to close in the third quarter of 2010.