CIFC lands two managed accounts – exclusive

The New York-based collateralised loan obligation manager will also be launching a new fund in the first quarter of 2017 after a sale of the firm to FAB Partners largely removed uncertainty regarding the firm’s future.

CIFC has secured two managed accounts worth $200 million from a “big credit allocator” and a client it works with under a US retirement law, sources close to the matter have told PDI.

The “big credit allocator” gave the New York-based investment firm a $150 million mandate involving CLO equity and mezzanine securities in CLOs. The other investor, an entity CIFC works in connection to the Employee Retirement and Income Security Act, a US law that sets standards for pension and health benefits, allocated $50 million to invest in CLO mezzanine loans.

The sources did not disclose investors’ identities, but said CIFC landed the larger account in April and the smaller commitment in August.

After announcing the firm’s $333 million sale to FAB Partners, CIFC is preparing to kick off its CIFC CLO Investment Opportunity Fund II, the sources added. The fund will invest in mezzanine loans and equity, both in CLOs and warehouses, in primary and secondary markets.

The fund will be launched in the first quarter of 2017. A target has not yet been set, the sources said, and size will depend on the market’s appetite. The initial incarnation of the CIFC CLO Investment Opportunity Fund, which had a $250 million target, never came to fruition.

CIFC declined to comment on the managed accounts or the fund.

Uncertainty over the firm’s future hindered the fund’s launch in the first quarter of this year after CIFC announced in January it hired JPMorgan to help it explore strategic alternatives. LPs were more hesitant to commit to a locked-up, closed-end fund but were open to managed accounts because LPs can withdraw their money sooner than a closed-end fund if needed, PDI understands.                                                            

Potential investors now may be less reticent to commit money after the firm’s majority shareholder, Columbus Nova, said it would vote in favour of the sale to FAB Partners, which is expected to close by the end of the year. The fact that current management will stay at the helm of CIFC could give investors an extra dose of certainty as well. CIFC shareholders will be paid $11.36 per share in the transaction.

CIFC is a manager of collateralised loan obligations and manages about $14 billion in assets.