Citigroup has acquired the management responsibilities for four CLOs from DiMaio Ahmad Capital (DA Capital) for an undisclosed sum.
The four CLOs, Duane Street CLO I, Ltd., Duane Street CLO II, Ltd., Duane Street CLO III, Ltd., and Duane Street CLO IV, Ltd., collectively manage $2 billion in assets. They will be managed by Citigroup’s Citi Capital Advisors unit, which currently has $16.2 billion in assets under management, $800 million of them in CLOs.
“The acquisition of DA Capital’s CLO business is of strategic value to Citi Capital Advisors as we further leverage our expertise and infrastructure in fixed income credit,” Jim O'Brien, co-chief executive of the asset management unit, said in a statement today.
Fred Hoffman, managing director and head of Citi Capital Advisors’ U.S. investment grade and high yield credit business, will be overseeing the management of the CLO platform. “CCA has broadened its footprint in fixed income investment products over the past two years and we plan to further expand our credit product offering in the coming year,” he said in the same statement.
Consolidation of CLO management has been underway since the financial crisis; while some of the early deals were driven by financial distress, these days many CLO managers are seeking economies of scale.
Last week, The Carlyle Group said it had purchased the management contract for a $500 million CLO from The Foothills Group.
DA Capital is an investment firm based in New York that manages hedge funds and structured credit vehicles. It was spun out of Credit Suisse Alternative Capital in 2005.