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Reuters: TCW Buying Direct Middle Market Lending Unit

December 04, 2012, 08:23 AM
Filed Under: Mergers & Acquisitions

Reuters reported TCW Group said it is buying a special situations funds group that would allow it to enter the direct lending business for middle market clients, ahead of its own sale to private equity firm The Carlyle Group LP.

The acquisition allows TCW to serve middle market companies with $30 million to $100 million of earnings before interest, tax, depreciation and amortization, according to the report.

TCW, a Los Angeles-based investment firm with $135 billion of assets under management (AUM), said on Monday it is acquiring the $2 billion AUM direct lending funds of Regiment Capital Advisors LP, a Boston, Massachusetts-based investment manager. Terms of the deal between TCW and Regiment, which is expected to close by the end of the year, were not disclosed, according to the report.

By getting into the direct lending investment business, TCW can provide investors with stronger returns than other fixed income instruments, without forcing them to bear the risk of equities, said Jess Ravich, who started at TCW as head of alternative products on Monday. Rick Miller, who headed Regiment's direct lending funds, will become group managing director of direct lending at TCW. Miller and Regiment's six-person investment team will remain in Boston and New York and will continue to manage their funds.

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