Dyal investment lets Atalaya boost GP commitments

The deal adds yet another portfolio company to Dyal’s growing list of investments in alternative asset managers.

Atalaya Capital Management has garnered a minority investment that will help it increase the amount of capital the firm contributes to its investment vehicles.

Dyal Capital Group took a minority stake, through which it will not have voting rights, in New York-based Atalaya, the firms said in a statement on Wednesday. Additional terms of the transaction were not disclosed. The proceeds of the transaction will stay on the investee’s balance sheet so it can put forward larger general partner commitments alongside outside capital it garners from third-party limited partners.

The firm made a contribution of $8 million to its $800 million Atalaya Special Opportunities Fund VI and a $5.25 million commitment to its $525 million Atalaya Asset Income Fund III, according to a source familiar with the matter. The former closed in April 2016 on $800 million and carries a 1.5 percent management fee and a 20 percent incentive fee on an 8 percent hurdle rate, as Private Debt Investor previously reported. The Asset Income Fund III closed in December.

“This capital allows us to continue developing our business for the future and invest more in our funds, fostering greater alignment with our investors,” Atalaya founding partner and chief investment officer Ivan Zinn said in the statement.

The investment in Atalaya adds yet another alternative lender to Dyal’s portfolio, which has added six companies over the last year. In April, the firm, which invests solely in alternative asset managers, added TSSP, TPG Capital’s credit arm, to its portfolio.

That same month it took a minority stake in New York-based collateralised loan manager Sound Point Capital Management, which used the capital infusion to grow its business. The investment included a commitment to the Sound Point CLO Fund, an open-ended vehicle launched in June 2015 to address impending CLO risk-retention rules. So far, that fund has garnered $146.97 million, according to a Friday regulatory filing with the US Securities and Exchange Commission.

Dyal formed in 2011 and manages $9 billion in assets. Atalaya invests in real estate, corporate and specialty finance and manages $2.5 billion in assets.