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Babson Buys Murray's Distressed Biz

Babson Capital Management has acquired Murray Capital Management's distressed debt management business. No financial terms were disclosed.




Babson Capital Management LLC (“Babson Capital”), an investment management firm based in Springfield and Boston, Mass., today announced that it has acquired Murray Capital Management, Inc.'s (“MCM”) distressed debt management business as the firm selectively expands its platform of client investment offerings. Terms were not disclosed.


MCM, based in New York City, specializes in distressed debt, transitional and stressed high yield, special situation equities and private-claims investing. The firm was founded in 1995 by Marti P. Murray, its current President, Portfolio Manager and Senior Research Analyst. MCM serves as one of the five underlying managers of the Dow Jones Hedge Fund Strategy Benchmarks for Distressed Securities.


Ms. Murray and her investment team will join Babson Capital and follow the same investment process and philosophy. The team will no longer use the Murray Capital Management name. Ms. Murray will report to Cliff Noreen, Head of Babson Capital's Corporate Securities Division and Vice Chairman of the firm.


“Marti and her team bring a wealth of distressed debt investing experience to Babson Capital, have a proven track record of success, and share our dedication to thorough research, a disciplined investment process and transparency,” said Mr. Noreen. “This acquisition is consistent with our philosophy of selectively adding capabilities that complement and extend the investment strategies we offer our clients. It is also well-timed given the unprecedented market dislocation that is creating distressed debt investment opportunities.”


“I am very excited that we are joining Babson Capital as this provides us with the resources of a larger firm, yet in an environment that will allow our team to continue the successful investment process we have followed for many years,” said Ms. Murray. “Babson Capital has a history of acquiring skilled managers and leveraging that expertise to the benefit of all. We look forward to continuing that tradition.”


The acquisition is Babson Capital's third in six years. Babson Capital acquired its Charlotte-based U.S. Bank Loan Team from Wachovia Corp. in 2002 and its London-based European bank loan business Babson Capital Europe Limited from Duke Street Capital in 2004.


MCM's activities consist primarily of investing in securities issued by companies undergoing financial difficulties because of underlying operational and/or balance sheet issues or serious and material litigation matters, such as product liability disputes. The firm invests from time to time in the newly issued debt and equity securities of companies emerging from a bankruptcy or reorganization proceeding, and may be either long or short depending on the view of the investment. The firm seeks to maximize total return in a risk- controlled fashion by identifying securities that are undervalued, or potentially overvalued, due to market inefficiencies.


Marti Murray has 21 years of experience investing in distressed debt securities and is an author, lecturer and speaker on the subject. Prior to forming MCM in 1995, she spent five years at Furman Selz Inc. as a senior managing director and portfolio manager for two proprietary and other discretionary accounts she established. From 1987-90, she was with Oppenheimer & Co. as a senior vice president and investment analyst for the Horizon Fund and other accounts that invested in the debt and equity of troubled companies. During 1986-87, Ms. Murray was an associate at First New York Capital, an investment bank for middle market companies that provided merger and acquisition, private placement and venture capital services. From 1982-86, she was an assistant vice president for Bank of America as a relationship manager for Fortune 500 accounts. She received an M.B.A. in Finance in 1986 from New York University Stern School of Business and a B.A. in International Relations and Chinese from Colgate University in 1981.


The MCM team will move from its current location at 680 Fifth Avenue to Babson Capital's New York City office at 340 Madison Avenue.


About Babson Capital Management


Babson Capital Management LLC and its subsidiaries manage more than $108 billion as of March 31, 2008 for sophisticated investors in the U.S. and abroad. The firm offers a wide range of absolute return, co-investing, financing and customized mandates utilizing equity, fixed-income and derivative instruments. Based in Boston and Springfield, Mass., and Charlotte, N.C., the firm has six additional offices in the U.S. with subsidiaries in London and Tokyo. Babson Capital is a member of the MassMutual Financial Group and is on the web at