Sun Life Financial unveiled its plans to acquire a majority stake in Crescent Capital Group, which has $28 billion in assets under management and 180 partners and employees.
The Los Angeles-based firm will form part of SLC Management, Toronto-based Sun Life’s alternatives asset management business. The transaction will allow Crescent to meet the growing needs of its institutional client base as they allocate more capital to alternative credit in search of yield in a low interest rate environment, officials added.
The deal consists of Sun Life’s purchase of a 51% interest in Crescent for up to $338 million (C$450 million). Crescent’s equity holders will retain carried interests in existing funds along with certain assets and their respective economics. The transaction has a put/call option that will allow the transfer of remaining interests approximately five years from the initial closing.
Founded in 1991, Crescent will continue to operate independently under its current leadership and will retain its own brand, office locations and clients. The firm specializes in mezzanine debt, middle market direct lending the U.S. and Europe, high-yield bonds and broadly syndicated loans.
This past spring, Crescent announced the final closing of its second European specialty lending fund, Crescent European Specialty Lending Fund II, with total limited partner commitments of €1.6 billion ($1.74 billion).
Sun Life now has committed to co-invest up to $750 million (approximately C$1 billion) in Crescent’s investment strategies, supporting the launch of new products and creating alignment with Crescent’s investors.
“We’re excited that Crescent will be joining SLC Management. Crescent has an excellent track record in alternative credit investing and an exceptional reputation in the industry,” said Steve Peacher, president of SLC Management, which has $193 billion in assets under management. “SLC Management and Crescent share a common vision based on delivering outstanding performance for our investors.”
Mark Attanasio, co-founder and managing partner of Crescent, touted the opportunity the deal has to benefit clients by the addition of seed capital and the commitment to allowing the firm to retain operational independence.
“With our longstanding investment track record, we look forward to further building upon our existing alternative credit investment capabilities, as well as providing clients with new investment strategies as the demand for yield grows globally among our roster of leading institutional investors,” added Jean-Marc Chapus, co-founder and managing partner of Crescent.
“We’ve been looking to expand our alternative credit capabilities for some time now, offering our clients a broader, deeper array of investment solutions across the public and private credit markets, infrastructure, real estate equity and debt,” added Peacher.
SLC Management, Sun Life and Crescent are signatories of the Principles of Responsible Investing (PRI) and committed to sustainable investing practices.
The transaction is expected to close before yearend.