Sound Point Capital Management announced plans to acquire Assured Investment Management, the institutional asset management business of Assured Guaranty offering CLOs and other structured asset-backed products.
The deal also has Assured Guaranty’s U.S. insurance subsidiaries investing $1 billion in Sound Point’s managed vehicles and separately managed accounts over time. Assured Guaranty will also become a significant equity holder of Sound Point, which manages $32 billion in credit-oriented investment assets.
This deal follows closely on the heels of Sound Point’s 2021 purchase of CVC’s direct lending unit.
In this latest transaction, Sound Point becomes the sole alternative credit manager for Assured Guaranty’s U.S. insurance subsidiaries. “Assured Guaranty’s investment commitment will be allocated to Sound Point managed CLOs as well as a range of other credit strategies,” said David Grill, head of strategy at Sound Point.
“This is a watershed event in Sound Point’s growth story, and it positions us for continued success in a business where scale has become increasingly important,” said Stephen Ketchum, Sound Point’s founder and managing partner. “It’s our largest transaction to date, and we’re extremely proud to be receiving a one-billion-dollar investment commitment over time from Assured Guaranty. We’re thrilled to be expanding our diversified platform through a powerful new partnership that will create immediate impact.”
Assured-IM was formerly known as BlueMountain Capital Management, which was acquired by Assured Guaranty on October 1, 2019, and subsequently rebranded as Assured Investment Management.
Following the acquisition, Sound Point will take over the management of approximately $15.2 billion in Assured-IM assets, predominantly across CLOs but also including structured asset-backed investments. Sound Point’s pro forma assets under management (AUM) are anticipated to total approximately $47 billion after consummation of the transaction.
Officials said that Sound Point will assume the management of 32 active Assured IM CLOs, comprising 25 US CLOs and seven European CLOs, making Sound Point the fifth largest broadly syndicated loan CLO manager globally on a pro forma basis. New York-based Sound Point is currently managing 39 CLOs of its own and also manages over $10 billion of assets in other areas of credit investing, including direct loans, capital solutions, distressed, structured products, commercial real estate lending, and specialty finance.
The transaction is expected to be completed at the beginning of Q3 2023. As part of the acquisition, a significant number of employees from Assured-IM are expected to join Sound Point, both in New York and London.
Sound Point will also remain a privately held company with Ketchum as managing partner and chief investment officer and the firm’s controlling equity holder. Principals of Stone Point Capital LLC and Dyal Capital Partners will continue to be important members of Sound Point’s ownership group, according to the corporate announcement.
