Alternative asset manager Rithm Capital Corp. announced plans to acquire private credit manager Crestline Management L.P., which manages $17 billion in assets, for an undisclosed sum. The transaction is expected to close in the fourth quarter.
The combination of Rithm and Crestline would create a platform with $98 billion in investable assets, including $45 billion in on-balance-sheet assets and $53 billion in assets under management, including the assets of Rithm subsidiaries Newrez, Genesis Capital and Sculptor Capital.
The acquisition will also give Rithm new capabilities in insurance and reinsurance through Crestline’s insurance and annuity subsidiary, CL Life and Annuity Insurance Co.
Rithm’s existing strategies include asset-based finance, real estate, structured and corporate credit, and energy and infrastructure. Crestline offers clients strategies across direct lending, opportunistic credit and fund liquidity solutions, and it also manages investment strategies for CL Life, according to the announcement.
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“This transaction demonstrates the power of our differentiated asset management platform and our commitment to diversifying our investment strategies,” said Michael Nierenberg, Rithm’s CEO, in a statement. “Crestline adds meaningful new credit and alternative investment capabilities, establishes our entrance into insurance and reinsurance, and creates additional value-creating opportunities for our investors and shareholders.”
Asset managers have increasingly turned to mergers and acquisitions to add the capability to offer private credit to clients. BlackRock’s $12 billion purchase of HPS Investment Partners, Franklin Templeton’s agreement to acquire Apera and Man Group’s proposed purchase of Bardin Hill are among such recent deals.
Alternative asset managers are also expanding their offerings in insurance and annuities, as insurers, whose portfolios have traditionally been bond-heavy, are increasingly diversifying into private strategies.
The long-term investment horizon of insurers generally fits well with the mandate of alternative asset managers that offer private strategies seeking to outperform over longer periods of time.
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Tags: insurance, Private Credit
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