Primus Guaranty and Commercial Industrial Financial Corp. (CIFC) expect to complete the proposed purchase by CIFC of Primus’ CypressTree Investment Management unit and the CLOs and structured credit funds it manages by the end of the month.
On Sept. 22, the firms had initially said that they had executed a binding letter of intent with regard to the proposed deal. Over the past several weeks, they have conducted the necessary due diligence and legal reviews. When this process is finalized, CIFC will become the owner of CypressTree as well as serve as the manager or sub-advisor of all CLOs and funds that CypressTree manages or sub-advises.
The transaction's completion will not be affected by recent reports about the purported transfer of the management of Hewett’s Island IV CLO, Ltd., an action that was started by the CLO’s equity investor well before CIFC’s interest in and agreement to buy CypressTree.
According to a Primus press release, independent research data confirms that CIFC is among the top-performing large CLO fund managers. Its track record is among the strongest among loan managers given that it has never breached an overcollateralization test in any fund and it has made equity distributions on all payment periods in all of its funds. It is also, according to the release, committed to stewardship for all investor classes of the funds that it manages.
“CIFC is a leader in its field, with top-notch talent, a reputation for integrity and a terrific performance record,” said Thomas Jasper, Primus Guaranty’s chief executive officer. “Primus and CIFC are working together to quickly close this transaction, ensure a smooth transition and eliminate any uncertainties on the part of our CLO investors.”
Peter Gleysteen, CIFC’s chief executive officer, said: “We look forward to closing this transaction quickly and welcoming CypressTree and Primus’ CLO investors to CIFC. We are committed to serving them well with the proven investment team and approach that have been the foundation of our success since our firm was founded.”
After the deal closes, CypressTree’s and CIFC’s investment platforms will be operationally integrated within CIFC’s existing investment model. CIFC and Primus are now working to ensure a smooth, seamless on-boarding of the management of the CLOs to CIFC’s platform, which both parties believe is in the best interest of both debt and equity investors in the funds.