LibreMax expanding into CLOs through Trimaran acquisition

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LibreMax Capital, an asset management firm that specializes in structured credit, is expanding into collateralized loan obligations with the acquisition of CLO management firm Trimaran Advisors.

The New York-based LibreMax announced the deal Friday, stating it will take over six CLOs with $3 billion in portfolio assets that Trimaran managed under former owner KCAP Financial (Nasdaq: KCAP).

Those deals include Trimaran’s $407.6 million Catamaran 2018-1 CLO that priced in September through Credit Suisse, according to Refinitiv (formerly Thomson Reuters LPC).

Terms were undisclosed.

“The addition of Trimaran expands our core products — diversifying our platform and offering our investors access to an asset class that has performed well through various credit cycles,” said Greg Lippmann, chief investment officer of LibreMax, in a release.

LibreMax’s investment focus includes mortgage-backed securities (both commercial and non-agency residential) and consumer asset-backeds.

The new business line will more than double LibreMax’s current assets under management ($2.9 billion).

During an earnings conference call with analysts last week, KCAP's president and chief executive, Dayl Pearson, gave no indication the CLO business was on the market. But he said KCAP was “open minded” in pursuit of “avenues that generate value and are constantly looking opportunities to bring shareholder value” of its CLO business.

Pearson said KCAP was considering one or two resets of existing CLOs that would extend and amend the terms of tenors of transactions.

Trimaran’s existing management will make the move to Trimaran to continue running the business, including chief investment officer Dominick Mazzitelli.

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