3i Debt Management is buying the majority of Invesco’s European collateralized loan obligation business, the companies said today.
The sale includes the management contracts for seven of Invesco’s eight European CLOs, vehicles with roughly €2 billion in assets primarily invested in subinvestment-grade debt issued by European companies. The terms of the agreement were not disclosed.
The transaction increases 3iDM’s assets under management to €6 billion and builds on the company’s strategy to grow its business in both Europe and North America, the firm said in a statement.
“This transaction ensures we are well-placed to capitalise on future opportunities,” Jeremy Ghose, managing partner and 3iDM CEO, said in the statement. “We continue our search for a U.S. platform in line with our strategy of playing a leading part in the consolidation of the debt market and creating a global credit platform of size.”
For its part, Invesco said the proceeds of the sale will be used to support its new issue CLO business in the U.S. and non-CLO loan funds in Europe.
"We strongly believe that we have greater and more immediate opportunities for CLOs in the U.S. marketplace, where we have a 13-year track record," Greg Stoeckle, head of Invesco's bank loan business, said in a statement. "We are highly committed to CLOs as one of the three cornerstones of our loan business. Post transaction we will continue to manage 16 CLOs totaling $5.3 billion in assets under management."
Twenty-nine investment professionals comprise Invesco’s bank loan team, in New York, Chicago and London, and that will not change, the firm’s release said. Pro-forma for this transaction, Invesco will retain approximately $14.5 billion of bank loan assets split fairly evenly between its floating-rate retail mutual funds, CLOs and non-CLO institutional loan funds.
3i Debt Management has a team of 30 people based in London. Following the acquisition it will manage a total of 17 funds across CLOs, private-equity fund of funds, mezzanine, and managed accounts, as well as the recently launched credit-opportunity fund Palace Street I.