Sankaty acquiring Regiment Capital CLOs

The CLOs have a total of $1.6 billion in assets and the deal should close by the end of the year.  

Sankaty Advisors, the credit affiliate of Bain Capital, has signed an agreement to purchase four CLOs with about $1.6 billion in assets from Regiment Capital Advisors. Financial terms were not disclosed.

The deal is expected to close at the end of the year, the firms said in a statement. Both Sankaty and Regiment are based in Boston.

The management contracts set to transfer to Sankaty are for Cavalry CLO II, III, IV and V. The CLOs' underlying assets are spread across a range of industries.

Sankaty itself has launched 27 CLOs since its founding in 1998. The firm has 12 active CLOs in the US and Europe. The new contracts will increase Sankaty's CLO assets to $7.8 billion and the firm's total assets to $28.7 billion.

“These assets are complementary to our existing CLO portfolios, which have been an important part of the Sankaty platform since 1999,” Jonathan Lavine, Sankaty managing partner and chief investment officer, said in a statement.

“We were selective in picking a partner to manage these assets and believe Sankaty will be a strong and valued steward of these assets going forward,” said Thomas Sorbo, a managing director at Regiment.

Berkshire Capital Securities, WilmerHale and Dechert are serving as advisors to Regiment. Ropes & Gray is acting as legal advisor to Sankaty.

It's unclear whether Regiment has sold off all of its CLOs to Sankaty. A Regiment spokeswoman declined to comment.

Bloomberg reported in May that the credit firm was shutting down its credit hedge fund. It was revealed at the time that Mark Brostowski, a portfolio manager on the hedge fund, would be leaving by year-end, while Michael Carroll, a CLO structurer and performance analyst, was set to leave in June. Closing the hedge fund, which had been underperforming for some time, meant that the firm would only have its CLO business and a separate account from a sovereign wealth fund remaining.

TCW acquired Regiment's special situations funds and launched a direct lending business, headed by Regiment's Rick Miller, in 2013.