Sun Life Financial revealed plans to acquire a 51% stake in US-based alternative credit investment manager Crescent Capital Group in deal worth up to $338m.
The consideration consists of $276m in the form of an upfront payment followed by up to $62m in future payment based on the meeting of certain milestones.
Established in 1991, Crescent Capital is an investor in mezzanine debt, middle market direct lending across the US and Europe, high-yield bonds and also broadly syndicated loans.
As of 30 June 2020, the company had nearly $28bn in assets under management. Headquartered in Los Angeles, the company also has offices in New York, Boston, and London.
Sun Life Financial likely to co-invest up to $750m in Crescent Capital
Apart from the acquisition of the majority stake, Sun Life Financial has committed to co-invest up to $750m in the US firm’s investment strategies, for supporting new product launches and for creating alignment with the latter’s investors.
According to Sun Life Financial, the US investment manager will become a majority-owned subsidiary of its alternative asset management business SLC Management. The US firm will extend the solutions of SLC Management in alternative credit, thereby benefitting existing and prospective clients.
SLC Management president Steve Peacher said: “We’re excited that Crescent will be joining SLC Management. Crescent has an excellent track record in alternative credit investing and an exceptional reputation in the industry.
“SLC Management and Crescent share a common vision based on delivering outstanding performance for our investors.”
The deal is said to give the US company the scope to bring together Sun Life’s investment capital and SLC Management’s relationships with its own expertise and track record in alternative credit.
Sun Life Financial said that this will support in expanding existing and new, adjacent strategies for the benefit of the constituencies of the two companies. Furthermore, it will help the US firm in coping up with the growing requirements of its institutional client base.
Crescent Capital co-founder and managing partner Mark Attanasio said: “This partnership represents the next stage of growth for Crescent.
“In getting to know the team at Sun Life and SLC Management, we feel confident our clients will benefit from the significant seed capital they are providing, their deep understanding of the asset management business, and commitment to Crescent retaining full investment and operational independence of the firm.”
Currently, Crescent Capital serves as the investment adviser of Crescent Capital BDC, a business development company. After the closing of the deal, it will continue to be the investment adviser of Crescent BDC subject to the approval of the latter’s shareholders.
The deal, which is subject to regulatory approvals and customary closing conditions, is expected to be completed in late 2020.
