The Carlyle Group said today it completed the acquisition of the management contracts of four European CLOs with total assets of €2.1 billion in from Highland Capital Management, an alternative asset management firm based in Dallas.
Financial terms were not disclosed.
The acquisition brings Carlyle’s CLO assets under management to $16 billion. Since August 2010, the firm has added $10.5 billion in CLO assets, through the acquisition of funds or management contracts from Highland, Stanfield Capital, Mizuho Financial Group, Foothill Group and Churchill Financial Group and through the launch of a $507 million CLO of its own in 2011.
However, the transaction is Carlyle’s first CLO purchase in Europe, where regulatory changes have brought new issuance of these structured products to a standstill. Highland opted to sell the four CLOs because it did not have the economy of scale to make the European structured finance business attractive in the current environment, according to a person familiar with the situation.
Mitch Petrick, Carlyle managing director and head of the global market strategies group, which houses the group’s CLO business, said the firm will look at additional acquisitions as the industry continued to consolidate.
Highland retains its U.S. CLO assets, which, along with the firm’s other strategies, total $20 billion.
In a statement, president and co-founder James Dondero said the firm intends to continue growing its U.S. CLO business while looking at other kinds of investment opportunities in Europe and in emerging markets.