Carlyle to Acquire CBAM Partners’ Portfolio of Assets
• Carlyle Global Credit to Become the World’s Largest CLO Manager
• Transaction is Expected to Provide a Recurring, High-Margin Fee Revenue Stream
• Carlyle’s Global Credit AUM will Increase to $88 Billion from $73 Billion
NEW YORK – Global investment firm Carlyle (NASDAQ: CG) announced today that it has agreed to acquire from CBAM Partners (“CBAM”), an affiliate of Eldridge, a portfolio of assets using a combination of $615 million in cash from Carlyle’s balance sheet and approximately 4.2 million newly issued common shares.
CBAM’s $15 billion in assets under management, the majority of which are in collateralized loan obligation (CLO) funds, will be integrated into Carlyle’s Global Credit platform. The transaction will increase Carlyle’s CLO AUM to approximately $48 billion, making Carlyle the world’s largest CLO manager1. Carlyle is also acquiring certain other CBAM assets across private credit that fit strategically into Carlyle’s Global Credit platform. The transaction will have an immediate and accretive impact to Fee Related Earnings and Distributable Earnings per common share.
Mark Jenkins, Head of Global Credit at Carlyle, said, “Acquiring these assets from CBAM adds scale to our already strong CLO business and creates shareholder value on day one by delivering a substantial and accretive increase in Fee Related Earnings. This transaction builds on our strong momentum as we continue growing the global credit platform in line with our strategic plan.”
Lauren Basmadjian, Co-Head of Liquid Credit and Head of US Loans & Structured Credit at Carlyle, said, “We have a strong track record of acquiring and integrating CLO portfolios and are excited to incorporate these CBAM assets into our platform. Through this transaction, we will build on our leading position in the growing leveraged loan and CLO asset classes and enhance our role as a key partner to investors and borrowers.”
Carlyle is already one of the largest CLO managers globally. In 2021, it issued 14 new broadly syndicated CLOs raising $7.4 billion, a record for Carlyle and making it one of the most active issuers during the year.
This acquisition supports Carlyle’s strategic plan to scale its Global Credit platform, which grew to $73 billion in AUM as of December 31, 2021, more than two times larger than it was less than four years ago. Global Credit has been Carlyle’s fastest-growing segment over that period. Global Credit raised a record $17 billion in 2021, driven in large part by CLO issuances. It also has expanded its platform through recent acquisitions including an agreement to acquire a $3 billion net lease real estate portfolio from iStar, expected to close during the first quarter, the acquisition of Fly Leasing and an agreement to acquire AMCK Aviation's aircraft portfolio, expected to close in the second quarter.
1 Based on Creditflux AUM figures as of December 31, 2021.
This transaction is expected to close in the first half of 2022 and is conditioned upon the satisfaction of certain customary closing conditions. BofA Securities is serving as financial advisor to CBAM, and Weil, Gotshal & Manges LLP is acting as its legal advisor. Latham & Watkins is serving as legal advisor to Carlyle.
Carlyle (NASDAQ: CG) is a global investment firm with deep industry expertise that deploys private capital across three business segments: Global Private Equity, Global Credit and Global Investment Solutions. With $301 billion of assets under management as of December 31, 2021, Carlyle’s purpose is to invest wisely and create value on behalf of its investors, portfolio companies and the communities in which we live and invest. Carlyle employs nearly 1,850 people in 26 offices across five continents. Further information is available at www.carlyle.com. Follow Carlyle on Twitter @OneCarlyle.
CBAM Partners is an investment management firm and SEC-registered investment adviser with $15 billion of AUM across the U.S. and Europe. The firm invests throughout the capital structure, from senior secured debt to common equity, across multiple platforms. CBAM is majority-owned by Eldridge, a diversified holding company.
Eldridge invests in businesses across the Insurance, Asset Management, Technology, Mobility, Sports & Gaming, Media & Music, Real Estate, and Consumer landscapes. The firm seeks to build and grow businesses led by proven management teams that have demonstrated leadership and experience to scale an enterprise. Eldridge is headquartered in Greenwich, Connecticut, with additional offices in Beverly Hills, New York, and London. To learn more about Eldridge, please visit www.eldridge.com.
This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements include, but are not limited to, statements related to our expectations, estimates, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts, including statements with respect to the proposed acquisition of the CBAM assets; the transaction’s effects on AUM, Fee Related Earnings and other performance metrics and the timing of such effects; the issuance of new equity securities and the availability of cash on hand to fund the transaction; and the expected timing of closing. You can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks, uncertainties and assumptions. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements including, but not limited to, failure to complete the acquisition or otherwise realize its anticipated benefits within the expected timeframes, unforeseen liabilities or integration and other
costs of the acquisition and timing related thereto, and those described under the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on February 10, 2022, as such factors may be updated from time to time in our periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and in our filings with the SEC. We undertake no obligation to publicly update or review any forward-looking statements, whether as a result of new information, future developments or otherwise, except as required by applicable law.