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Sound Point Capital to Acquire Assured Investment Management

April 05, 2023, 07:55 AM
Filed Under: Industry News

Sound Point Capital Management, a credit-oriented investment manager overseeing approximately $32 billion in total assets, entered into an agreement to acquire Assured Investment Management LLC and certain of its related asset management entities (“Assured-IM”), which conducts the institutional asset management business of Assured Guaranty Ltd.. In connection with the strategic partnership, Assured Guaranty will become a significant equityholder of Sound Point and certain of Assured Guaranty’s U.S. insurance subsidiaries will commit to invest $1 billion over time in Sound Point managed vehicles and separately managed accounts. Sound Point will become the sole alternative credit manager for the Assured Guaranty U.S. insurance subsidiaries.

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.

“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.”

The transaction is expected to be completed in 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.

Following this acquisition, Sound Point will take over the management of approximately $15.2 billion (as of December 31, 2022) 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.

“This acquisition further strengthens our platform and will allow Sound Point to leverage its already comprehensive firmwide infrastructure and investment teams,” said David Grill, Head of Strategy at Sound Point. “Assured Guaranty’s investment commitment will be allocated to Sound Point managed CLOs as well as a range of other credit strategies”.

The combination of Sound Point and Assured-IM’s technology and systems will further improve reporting capabilities and speed. The combined team will focus on continued excellence and tight operational controls, benefiting from each other’s existing processes and previous experience.

Sound Point will remain a privately held company, with Stephen Ketchum as Managing Partner and Chief Investment Officer and the firm’s controlling equityholder. Principals of Stone Point Capital LLC and Dyal Capital Partners will continue to be important members of Sound Point’s ownership group.

Assured-IM was formerly known as BlueMountain Capital Management, LLC. BlueMountain was acquired by Assured Guaranty on October 1, 2019, and subsequently rebranded as Assured Investment Management.

BofA Securities acted as financial advisor, and Pryor Cashman LLP and DLA Piper LLP acted as legal advisors, to Sound Point. Goldman Sachs & Co. LLC and Insurance Advisory Partners LLC served as financial advisors to Assured Guaranty and Mayer Brown LLP served as Assured Guaranty’s legal advisor.

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