(Bloomberg) -- Alternative asset manager Dawson Partners bundled up and sold private capital fund stakes as part of a $1.2 billion securitization, according to people familiar with the matter.
Dawson completed the collateralized fund obligation earlier this year, the latest in a series of such deals it has done over roughly the last 18 months, the people said, requesting anonymity to discuss sensitive information. The deal was divided into multiple debt pieces rated by Kroll Bond Rating Agency as well as a riskier first-loss piece, with law firm Fried, Frank, Harris, Shriver & Jacobson LLP serving as legal counsel, said one of the people.
Dawson Partners declined to comment. Fried Frank and KBRA didn't respond to requests for comment.
Such securitizations use cash flows from stakes in private equity or credit funds to back debt. Toronto-based Dawson, formerly named Whitehorse Liquidity Partners, specializes in helping investors in private equity funds get access to cash. The firm's assets under management topped $20 billion as of the end of last year, according to a press release.
As private equity fund managers look for ways to generate cash amid a slump in dealmaking, bespoke securitizations have been gaining in popularity. There's ample demand from insurance companies to buy the vehicles, especially after newly finalized rules cleared up uncertainty about just how much money insurers need to set aside to hold the deals on their balance sheets.
Insurers in the US manage over $8 trillion of assets and have been buying larger amounts of illiquid assets, including CFOs. The vehicles let insurers get economic exposure to private funds at lower capital charges than if they were to buy shares of the funds directly.
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