CIFC getting a FAB injection

The US CLO manager has signed a deal to be acquired by FAB Partners, a Jersey-based investment firm, for $333 million in cash with backing from the Qatar royal family.  

CIFC and FAB Partners have entered into a merger agreement whereby FAB will acquire CIFC for about $333 million in cash, the two firms announced 19 August.

FAB, a new firm formed by former Deutsche Bank and Goldman Sachs executives earlier this year, secured the capital for the purchase from Supreme Universal Holdings, a company controlled by Qatar’s royal family.

The transaction was approved by CIFC’s board of directors, while Columbus Nova, CIFC’s majority shareholder, has agreed to vote its shares in favor of the deal. The deal is expected to close by year-end.

CIFC, a New York-based manager of collateralised loan obligations, has about $14 billion in assets. The publicly-traded firm revealed that it was looking at sale options in January. At the time, CIFC executives said the sale would likely see Columbus Nova, the investment management arm of Russia’s Renovo Group, cashing out all or most of its stake.

Oliver Wriedt, co-president at CIFC, declined to say whether Columbus Nova has been completely bought out or whether the deal might result in CIFC going private. Columbus Nova did not return a call seeking comment.

Under the terms of the agreement, CIFC shareholders will receive $11.36 per share as consideration in the merger, plus a 10 cent per share distribution, representing a premium of 60 percent over CIFC’s closing share price on 19 August and a 160 percent premium over the closing share price on 27 January, the day before CIFC’s announcement of its plans to sell.

FAB was founded by former Deutsche Bank executives Michele Faissola and Nizar Al-Bassam, as well as Dalinc Ariburnu, Goldman Sachs’ former co-head of fixed income, currency and commodity sales. The CIFC stake is the firm’s first such deal. The FAB platform was built to take equity stakes in a variety of asset managers, Private Debt Investor understands.

CIFC executives were looking for a buyer that would keep the current management and platform intact, while helping them achieve some of their growth initiatives. They have now found such a deal with FAB, Wriedt told PDI.

“We have solved our aspirational goals in finding a buyer that would help us grow the investment programme,” Wriedt said.

CIFC executives hope the merger will help them expand their product lineup, and capital from the new buyer should help the firm issue risk retention-compliant deals.

“With the support of FAB, our company embarks on a new chapter of growth and product line expansion,” Stephen Vaccaro, co-president and chief investment officer at CIFC, said in a statement.

Faissola, co-founding partner at FAB, added:  “CIFC’s highly experienced investment team, institutional infrastructure and blue-chip client base, make them an ideal partner for us as we look to access the US market for our clients. Our clients are committed to capitalising on both current and future investment opportunities in the US and we view CIFC as our beachhead into these exciting opportunities.”