Northill Capital will purchase a 60 percent stake in high yield specialist Capital Four.
The UK-based asset manager is buying the stake from a recently retired partner in the firm, along with an extra slice taken from existing partners. Following the deal, existing partners Sandro Naf, Torben Skodeberg and Henrik Ostergaard will control the remaining 40 percent.
The financial terms of the deal were not disclosed but the sale follows a turbulent period for the European high yield markets.
Founded in 2007, Copenhagen-based Capital Four has approximately €6 billion in assets under management. It is the largest independent high yield investment manager in Europe and focuses on four strategies: high yield, leveraged loans, credit opportunities and direct lending. The firm’s direct lending unit focuses on senior and subordinated loans to Nordic small- and medium-sized enterprises.
Northill said that Capital Four’s European high yield strategy has consistently outperformed its benchmark and added that the purchase was in line with its long-term investment strategy focused on single-purpose asset management businesses. Capital Four will remain in Copenhagen with day to day operational independence.
Non-equity partners in Capital Four will be offered a stake in the business over time while other employees will have indirect exposure through the firm’s warrant programme, said Northill in a statement.
The three minority equity partners have committed to holding their position for a minimum of five years, as well as promising to re-invest at least 50 percent of their after tax proceeds from investments.
Sandro Naf, chief executive and co-founder of Capital Four, said: “Northill’s engagement ensures that Capital Four will continue as an independent firm where existing management continues to run the business, and will enable us to more readily broaden equity ownership to the firm’s future leaders.”
Northill Capital is a privately controlled asset management business established in London in 2010 by Jonathan Little, a former vice-chairman of BNY Mellon Asset Management, with substantial financial backing from interests associated with the Bertarelli family.
Combined assets under management in which Northill owns a majority interest total approximately $30 billion at 31 December 2015.