Primus Guaranty completed the sale of its third-party asset management subsidiary CypressTree Investment Management to Commercial Industrial Finance Corp. (CIFC). Terms of the transaction were not disclosed.
CypressTree both manages and subadvises around $2.6 billion of high yield and leveraged loan assets in seven CLOs and two other funds. The collateral management contracts for the CLOs and the two other funds were included in the sale.
Primus Guaranty’s credit protection business, comprising Primus Financial Products’ $11.8 billion portfolio of credit default swaps, is not impacted by the sale. Primus Financial Products will still be part of Primus Guaranty and will still be managed by Primus Financial portfolio managers.
Berkshire Capital Securities was the advisor to Primus on the sale of the CLO business.
“The completion of this transaction enables us to further sharpen our focus on our key goal: preserving the value of our credit protection business in amortization,” said Richard Claiden, Primus Guaranty’s chief executive officer. “At the same time, it ensures our CLO investors will continue to be well served by the top-notch professionals at CIFC.”
“Effective immediately, CypressTree’s activities will be operationally integrated within CIFC’s existing investment model, which we believe will benefit all investors in these funds," Peter Gleysteen, CIFC’s chief executive officer, stated. "CIFC has implemented a plan to ensure a smooth, seamless transition of the management of the CLOs and other funds and their underlying investments into CIFC’s platform.”