Loan Note: Sun Life wraps up Crescent deal; time to submit your awards highlights

Sun Life should have its acquisition of debt fund manager Crescent Capital Group wrapped up by the end of the year. Plus, a new lending platform for Oaktree and the launch of our 2020 awards. Here's today's brief for our valued subscribers only.

They said it

“We believe too much focus has been put on security at the expense of adequacy and affordability, leaving pensions savers with low investment returns. We need to rethink what represents an acceptable level of risk into our pension system”

Benoit Hudon, UK head of wealth at Mercer, in a statement announcing the release of the Mercer CFA Institute Global Pension Index, which found covid-19 heightening the financial pressures on retirees and reducing pension contributions

First look

Sun Life swoops for fund manager Crescent
It was well known that Canadian insurer Sun Life Financial had been on the lookout to acquire a mid-market private debt firm since the beginning of this year, as it sought to expand its asset management unit into higher-yielding investments. The hunt is now complete, with the announcement that it is taking a 51 percent stake in Crescent Capital Group for up to $338 million. The deal is expected to complete before the end of the year.

Los Angeles-based Crescent Capital had around $28 billion in assets under management at the end of June. The firm – which also has offices in New York, Boston and London – was founded in 1991 and is active in mezzanine debt, mid-market direct lending in the US and Europe, high-yield bonds and broadly syndicated loans.

The deal will see Crescent become part of SLC Management, Sun Life’s alternative assets management business, thereby extending its reach in alternative credit. Sun Life has said it will invest up to $750 million in Crescent’s investment strategies to support the launch of new products and create alignment with Crescent’s investors.

The deal value comprises an initial $276 million and a possible future payment of $62 million based on the achievement of certain milestones.

“We look forward to building upon our existing alternative credit investment capabilities, as well as providing clients with new investment strategies as the demand for yield grows globally among our roster of leading institutional investors,” said Jean-Marc Chapus, co-founder and managing partner of Crescent Capital.

Crescent ranked 23rd in the 2019 edition of our PDI 50, which ranked the largest fundraisers in private debt over a rolling five-year period.

PDI Awards 2020: we want to hear from you
It’s been the most challenging of years, but wouldn’t it be some consolation to be toasting victory in one (or more) of our 48 awards categories?

At the end of last week, we began calling for your annual highlights. See our story here, where you can link to a form and remind us of your firm’s accomplishments since 1 January. You have until close of business on Friday 13 November to get back to us.

Data snapshot

North America back in favour. Our fundraising figures for the first nine months of 2020 show North America resuming its place as a more preferred destination for private debt capital than Europe – which had briefly removed it from its throne earlier in the year. However, multi-regional approaches remain the most popular magnet for investors.


ICG in sale-and-leaseback hire 
Intermediate Capital Group has announced the appointment of Chad Brown as a managing director for its sale-and-leaseback strategy.

Brown joins ICG from CBRE, where he was a senior director in the EMEA corporate capital markets team. He has experience of deal origination and building strategic relationships with corporate owners and occupiers of real estate.

Over the last 10 years, he has advised corporates and private equity-backed businesses on sale-and-leaseback and forward-funding strategies in Europe. At ICG he will focus on seeking investment opportunities from the corporate owner-occupied European real estate sector.

Encina, Oaktree launch new platform
Encina Capital Partners and an affiliate of certain funds managed by Oaktree Capital Management have launched Encina Lender Finance. The new independent lender finance platform will target commercial and consumer speciality finance companies in the US and Canada.

Headquartered in Atlanta, ELF will offer revolving lines of credit and term loans ranging from $10 million to $40 million to speciality finance companies (sponsored and non-sponsored) across a range of asset classes, including asset-based lending, factoring, equipment leasing and floorplan financing.

LP watch

Institution: Taiwan Life Insurance
Headquarters: Taipei, Taiwan
AUM: NT$1.9 trillion
Allocation to alternatives: 2.0%

Taiwan Life Insurance has agreed to commit €25 million to Ares Capital Europe V. The fund is seeking to raise €9 billion.

The Taiwanese insurer’s recent commitments have been to vehicles focused on corporates in North America and Europe.

Today’s letter was prepared by Andy Thomson with John BakieRobin Blumenthal and Adalla Kim.

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