The U.S. Department of the Treasury said Thursday that The TCW Group has repaid more than $200 million in debt it owed the federal government as result of its decision to opt out of the Public Private Investment Program (PPIP).
On Jan. 4, the Los Angeles-based firm decided to withdraw its UST/TCW Senior Mortgage Securities Fund, which had approximately $500 million in assets under management as of Sept. 30, from the Treasury program. TCW said it would liquidate the fund and redistribute capital to its investors.
The 40-year old firm Societe Generale subsidiary, which has more than $108 billion in assets under management, was selected to participate in the program over the summer.
In an email today, Meg Reilly, Treasury spokesperson, confirmed that TCW has repaid the Federal agency $34 million on Jan. 11, and $166 million on Jan. 12. Additionally, Reilly said that there is still $156.25 million in equity outstanding.
“The debt repayments were made because TCW has opted out of the PPIP,” Reilly said. “And yes, the equity is still outstanding.”
Previously, Reilly verified on Dec. 9 that the Treasury had frozen TCW’s PPIP fund due to the dismissal of Jeffrey Gundlach, former TCW CIO. Gundlach, who started his new firm DoubleLine Capital shortly after the termination, had previously headed the funds for the firm.
Additionally, Reilly told Investment Management Weekly that the Treasury had notified TCW of what the agency calls “a key person event” and that it was evaluating the situation.
Since its early December formation, DoubleLine Capital has added “nearly 40” TCW departures to its staff, a number Erin Freeman, TCW spokesperson, confirmed last month. And as an attempt to replete its investment roster, TCW acquired bond manager Metropolitan West Asset Management (MetWest).
"…In light of the recent changes in the portfolio management team, we believe this action is appropriate and in-line with TCW's commitment to act in the best interests of our clients," Marc I. Stern, TCW CEO, said in the Jan. 4 statement. "This will also benefit the holders of older TCW vintage funds, as we will be able to dedicate even more resources to those investments."
