Alternative credit specialist CIFC to acquire direct lender LBC

Alternative credit specialist CIFC Asset Management said it agreed to acquire direct lender LBC Credit Partners, according to a news release. The terms of the acquisition were not disclosed.

In the acquisition, which will close later this year, LBC’s team and investment funds will become part of the CIFC platform as a subsidiary.

“Scale matters a lot in the credit business these days with fee compression and rising expenses,” said Steve Vaccaro, chief executive officer and chief investment officer at CIFC, in an interview with Private Debt Investor. “Private credit offers many benefits for investors looking for lower price volatility and the opportunity to get high real returns in a world searching for yield.”

The acquisition of LBC is part of a growing trend by credit managers to diversify investment offerings to their investor base, CIFC said.

“We increasingly found that our LPs are looking for managers who offer a variety of different credit-related products and that they don’t want to have to change managers to re-allocate to different credit strategies,” said Vaccaro of CIFC’s limited partner base.

“Our LPs are interested in multi-strategy credit in a variety of formats, from loans to bonds to structured credit,” Vaccaro said. “We believe that one of the things we do well is our ability to customize our solutions for clients and not shoehorn them into a few pre-fixed fund structures.”

“LBC’s private credit offering is a different strategy and execution process than other strategies CIFC already plays in,” said John Bignola, senior managing partner at LBC, in an interview with PDI. “We were looking for a partner with no overlap where we could allow our team to grow professionally, and we found that CIFC was a perfect partner for us.”

New York-based CIFC, which founded in 2005, is a global credit specialist that offers CLOs, corporate, structured and opportunistic credit strategies. It manages more than $35 billion in assets.

Philadelphia-based LBC, also founded in 2005, focuses on US middle market and lower middle market direct lending and holds more than $3 billion in assets under management.