Ares Management LP and Apollo Investment Corp, the business development company of Apollo Global Management LLC, are among those competing for the assets of American Capital Ltd, people familiar with the matter said.
Fortress Investment Group LLC and Blackstone Group LP have also submitted expressions of interest in the auction for American Capital, a U.S. private equity and credit investment firm with a market capitalization of $3.8 billion, the people said this week.
American Capital, which said in January it would solicit offers for the company and its various business lines, will collect another round of offers before deciding on its next steps, the people added.
They asked not to be identified because details of the sale process are confidential. American Capital, Ares, Apollo, Fortress and Blackstone declined to comment.
Based in Bethesda, Maryland, American Capital originates, underwrites and manages investments in middle-market private equity, leveraged finance, real estate and structured products. Including leverage, it manages a total of $73 billion in assets.
Last November, activist hedge fund Elliott Management Corp unveiled a stake in American Capital, criticized its performance, and called on the company to abandon a plan to spin out assets into a separate business development company.
Other investment firms now see the auction for American Capital as an opportunity to boost their assets, as jitters in the junk debt markets and a regulatory crackdown on risky loans have led many traditional market players such as banks to scale down their lending.
Last year, General Electric Co agreed to sell its private equity lending portfolio to Canada Pension Plan Investment Board for $12 billion following an auction that also attracted several alternative asset managers.
(Reporting by Greg Roumeliotis and Mike Stone in New York, additional reporting by Michael Flaherty in New York; Editing by Tom Brown)