European buyout firm CVC Capital Partners has agreed to buy Resource America’s CLO unit in a move to expand in the U.S., the two companies said in separate statements today.
London-based CVC will combine its Cordatus debt unit with Resource’s CLO manager, Apidos Capital Management, for which it will pay $25 million. Marc Boughton, who started CVC Cordatus, will head the new firm, called CVC Credit Partners.
Gretchen Bergstresser and Jonathan Bowers will serve as senior portfolio managers. Jonathan Cohen, CEO of Resource America, will serve as chairman.
Resource, based in Philadelphia, will keep a 33% stake in CVC Credit Partners, which will manage $7.5 billion of assets across 21 vehicles in the U.S. and Europe, the firms said.
The transaction is subject to typical closing conditions, including regulatory approvals and certain third-party consents. It is estimated that closing will occur during the Company's second fiscal quarter ending March 31.
CVC’s purchase follows similar moves by other private-equity firms, such as Blackstone Group, in expanding in credit fund management to diversify fee revenue. Blackstone, one of the world’s largest buyout firms, became the biggest manager of CLOs after buying Dublin-based Harbourmaster Capital Management in October.
Meanwhile, Carlyle Group is reportedly in talks to buy Highland Capital Management’s CLO unit. And Apollo Global Management agreed in December to buy Stone Tower Capital, adding $17 billion in credit assets and making capital markets its biggest business unit.
CVC manages a €10.8 billion ($14 billion) European buyout fund including recently purchased U.S. company BJ’s Wholesale Club and crowd favorite Formula One. The firm started Cordatus in 2006 to invest in subinvestment grade debt capital markets in Europe. Cordatus manages €1.5 billion in assets, according to its Web site. Apidos was formed in 2005 and targets U.S. speculative-grade corporate debt.