American Capital Ltd. said Wednesday that it has agreed to establish American Capital CLO Fund I LP, a $450 million fund that invests in equity tranches of CLOs. The fund is buying $300 million of American Capital’s existing CLO equity portfolio and will have $150 million of investment capacity. The fund is expected to close in 90 days.
BETHESDA, Md., Aug. 5, 2015 /PRNewswire/ — American Capital, Ltd. (Nasdaq: ACAS) (“American Capital” or the “Company”) announced today that it has entered into a definitive agreement to establish American Capital CLO Fund I, LP (“American Capital CLO Fund I” or the “Fund”), a new $450 million fund focused on investing in equity tranches of collateralized loan obligations (“CLOs”). Closing of the Fund is expected to occur within 90 days and is subject to standard conditions. The transaction further expands American Capital’s asset management business and will increase American Capital’s third-party earning assets under management by$450 million, or 3%.
The Fund, which will be comprised entirely of third party investors, will purchase $300 million of American Capital’s existing CLO equity portfolio at its fair value as of June 30, 2015, subject to standard adjustments. The Fund will have $150 million of investment capacity and an affiliate of American Capital’s asset management company, American Capital Asset Management, LLC (“ACAM”), will manage the fund for customary management and incentive fees.
The proceeds are expected to be used by American Capital for general corporate purposes, including for its investment and lending activities.
Kirkland & Ellis LLP is serving as lead counsel to American Capital on the transaction. Cleary Gottlieb Steen & Hamilton LLP is serving as lead counsel for the investors.
Following the closing, ACAM will manage fourteen private funds and three public funds with approximately $16 billion of third-party earnings assets under management and $82 billion of total assets under management (including levered assets). ACAM manages publicly traded American Capital Agency Corp. (Nasdaq: AGNC), American Capital Mortgage Investment Corp. (Nasdaq: MTGE) and American Capital Senior Floating, Ltd. (Nasdaq: ACSF). In addition, ACAM manages private funds American Capital Equity I LLC, American Capital Equity II LP, American Capital Equity III, LP, American Capital CLO 2007-1, Ltd., American Capital CLO 2012-1, Ltd., American Capital CLO 2013-1, Ltd., American Capital CLO 2013-2, Ltd., American Capital CLO 2014-1, American Capital CLO 2014-2, Ltd., American Capital CLO 2015-1, Ltd., American Capital CLO 2015-2, Ltd., European Capital UK SME Debt and a European Capital debt fund.
ABOUT AMERICAN CAPITAL
American Capital, Ltd. (Nasdaq: ACAS) is a publicly traded private equity firm and global asset manager. American Capital, both directly and through its asset management business, originates, underwrites and manages investments in middle market private equity, leveraged finance, real estate, energy & infrastructure and structured products. American Capital manages $23 billion of assets, including assets on its balance sheet and fee earning assets under management by affiliated managers, with $81 billion of total assets under management (including levered assets). Through a wholly owned affiliate, American Capital manages publicly traded American Capital Agency Corp. (Nasdaq: AGNC), American Capital Mortgage Investment Corp. (Nasdaq: MTGE) and American Capital Senior Floating, Ltd. (Nasdaq: ACSF) with approximately $11 billion of total net book value. From its eight offices in the U.S., Europe and Asia, American Capital and its wholly owned affiliate, European Capital, will consider investment opportunities from $10 million to $600 million. For further information, please refer to www.americancapital.com.
This press release contains forward-looking statements. Such statements are subject to various factors and uncertainties, including the uncertainties associated with the timing of transaction closing, changes in interest rates, availability of transactions, changes in regional, national or international economic conditions, or changes in the conditions of the industries in which American Capital has made investments.
This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities. The offering of these securities have not and will not be registered under the Securities Act of 1933, as amended and may not be offered absent registration or an exemption from registration.