(Bloomberg) -- Redding Ridge Asset Management, an affiliate of Apollo Global Management Inc., is purchasing collateralized loan obligation manager Irradiant Partners LP, as credit firms continue to merge as part of their growth efforts.
Apollo will assume about $2.2 billion of private credit and renewable assets from Irradiant as part of the deal, while RRAM will add almost $11 billion of CLO assets to its firm. With the deal, RRAM will become one of the largest CLO managers in the US with about $38 billion of assets, according to a statement. RRAM will fund the purchase using cash on its balance sheet.
John Eanes, the co-chief executive officer of Irradiant with Jon Levinson, will become chief investment officer of RRAM in the US. RRAM and Apollo expect to retain a majority of Irradiant's employees and expand the US portfolio team, according to the statement. Levinson and Irradiant Chairman Michael Levitt will join Apollo.
The acquisition comes as alternative asset managers continue to merge or be bought out, boosting firms' CLO and private credit assets in the process. BlackRock Inc. agreed to buy HPS Investment Partners last year in a deal that would leave BlackRock with almost $600 billion of alternative assets. Blue Owl Capital Inc. also recently purchased Atalaya Capital Management, while Janus Henderson Group Plc agreed to buy Victory Park Capital Advisors.
"We are in a market where scale and operating leverage are critical to portfolio management as well as the business model," Bret Leas, a RRAM board member and Apollo's co-head of asset-based finance, said in the statement.
The purchase is subject to regulatory approval, with a first close expected in the second quarter of this year.
The $1.3 trillion CLO market, which repackages leveraged loans into bonds of varying risk and kind, was on a tear last year. Sales of CLOs reached a record of $201 billion in 2024, according to data compiled by Bloomberg, partly due to tightening spreads and more buyers coming into the market. CLO total returns ranged between 8% and 21% due to sharp spread tightening last year, with Nomura analysts determining CLO equity had its best year since 2021, averaging 25% for total returns.
More stories like this are available on bloomberg.com
