American Capital raises $450 mln to invest in equity tranches of CLOs

American Capital closed American Capital CLO Fund I, LP on $450 million to invest in the equity tranches of collateralized loan obligations. The fund already acquired $300 million of American Capital’s existing CLO equity portfolio and has $150 million of investment capacity. An affiliate of American Capital Asset Management manages the fund.

Press Release

American Capital, Ltd. (Nasdaq: ACAS) (“American Capital” or the “Company”) announced today that it has closed American Capital CLO Fund I, LP (“American Capital CLO Fund I” or the “Fund”), its new $450 million fund focused on investing in equity tranches of collateralized loan obligations (“CLOs”). The transaction further expands American Capital’s asset management business and increases American Capital’s third-party earning assets under management by approximately $450 million, or 3%.

“We are very pleased to announce the closing of American Capital CLO Fund I,” said Mark Pelletier, President of American Capital CLO Management, LLC and President and Chief Investment Officer of American Capital Senior Floating, Ltd. “Our partners spent a significant amount of time underwriting both the assets and our team. Their willingness to acquire a large pool of these assets at our carrying value, in conjunction with entrusting us to manage both these assets and the new investments we will make on their behalf, speaks to the trust they have placed in us.”

As previously announced, the Fund purchased $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 has $150 million of investment capacity and an affiliate of American Capital’s asset management company, American Capital Asset Management, LLC (“ACAM”), manages the fund for customary management and incentive fees.

“American Capital CLO Fund I is an important milestone in the development of our asset management platform,” said Tom McHale, American Capital Senior Vice President, Finance. “This is our first fund dedicated to CLO equity and it diversifies our asset management income while leveraging an existing investment team.”

Following the closing, ACAM manages fourteen private funds and three public funds with approximately $15 billion of third-party earnings assets under management and $81 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 debt fund.

American Capital announced the launch of American Capital CLO Fund I on August 5, 2015. For more information, please refer to the press release.

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.

SOURCE American Capital, Ltd.