Toronto-based asset manager Mount Logan Capital has joined forces with Sierra Crest Investment Management, an affiliate of London-based private equity firm BC Partners, to agree the acquisition of certain assets from Resource America, a Philadelphia-based asset manager specialising in real estate and credit investments.
As part of the deal, SCIM will become investment adviser to the Resource Credit Income Fund, a US-based closed-ended interval fund investing across direct credit, private credit and public credit. The fund had $240 million of assets under management at the end of May this year.
Interval funds – hybrids between hedge funds and closed-end debt funds which repurchase investor shares at regular intervals – are in vogue in the private credit world. The main difference between these hybrid funds and a typical debt fund is that the interval fund manager periodically buys back investors’ shares, which cannot be traded on a secondary market.
Mount Logan said the deal would expand its business into non-traded retail, providing a new means of growth for the company. It said the fund’s assets were complementary to its existing portfolio, investment mandate and experience and would provide a high-returning, stable and recurring management fee stream into its earnings.
The firm added that it expected to retain key management and vendor contracts of the fund “to ensure a seamless transition”.
Details of the financing for the purchase were not provided other than that it will consist of a combination of cash, equity and/or debt. The transaction is expected to close in the fourth quarter of 2020 subject to approval by the shareholders of RCIF.
The parties to the deal could not be reached for comment by time of publication.