Apollo Global Management and its subsidiaries bought Gulf Stream Asset Management, which now manages 10 CLOs and has over $3 billion in assets under management.
The deal, according to a release from Apollo, is in line with its strategy to expand its existing traditional fixed-income business. Upon closing, the transaction should bring the assets under management of Apollo's capital markets business to roughly $27 billion.
Additionally, Apollo's senior loan business is expected to exceed $14 billion upon closing of the transaction. The deal is expected to close in 3Q11.
As a result of the merger, Mark Mahoney, founder and president of Gulf Stream Asset Management, will be joining Apollo as a partner.
"As we continue to observe the consolidation of credit managers, we believe that our investors will benefit from Apollo's leading global integrated investment platform and its credit and capital markets expertise," Mahoney said. "We believe the depth of Apollo's global asset management business and its focus on seeking to maximize investors' returns while protecting their capital will serve Gulf Stream's existing investors well. I am also excited to be joining the Apollo team and working to continue to grow Apollo's senior loan business."
"This transaction is a strategic extension of our CLO franchise and we believe strengthens our position as a leader among the new breed of loan managers." said James Zelter, managing director of Apollo Global Management's capital markets business. "We believe that scale is essential in our industry and, following our recent IPO for the Apollo Senior Floating Rate Fund and in closing several new CLO transactions over the past year, we are looking forward to working with members of the Gulf Stream team. We believe this transaction further solidifies our position as one of the largest loan managers in the world and expands the depth and diversity of our product offerings."