Opalesque Industry Update - Primus Guaranty, Ltd. today announced it has entered into a binding letter of intent to sell CypressTree Investment Management, LLC, its third-party asset management subsidiary, to Commercial Industrial Finance Corp. Terms of the transaction were not disclosed.|
CypressTree manages or subadvises approximately $2.8 billion of high yield and leveraged loan assets in eight collateralized loan obligations. These CLOs include: Primus CLO I and II, and Hewett’s Island CLO I-R, II, III, IV, V and VI. The collateral management contracts for the eight CLOs will be included in the sale. A total rate of return swap and a collateralized swap obligation managed by CypressTree also will be included in the sale.
CIFC is a top-performing credit asset management business that manages $3.6 billion in assets across seven CLOs. The firm’s team of 15 investment professionals averages 17 years of experience and is led by Peter Gleysteen, a pioneer of the U.S. corporate loan market.
“The divestiture of CypressTree is part of our previously announced plan to focus on managing and preserving the value of our credit protection business in amortization,” said Thomas W. Jasper, Primus Guaranty’s chief executive officer. “While CLO management is no longer a core business for Primus, CIFC’s talent, experience and track record helps to ensure that our CLOs and CLO investors remain in the hands of one of the premier credit investment firms.”
Peter Gleysteen, CIFC’s chief executive officer, stated, “We are pleased to add the CypressTree business to our existing platform. With this transaction, CIFC will have over $6 billion in assets under management, and we believe that the additional scale and our leading track record will be beneficial to all debt and equity investors in the CypressTree, Primus and CIFC CLOs.”
Primus Guaranty’s credit protection business, which consists of Primus Financial Products’ $14 billion portfolio of credit default swaps, is not affected by the sale. Primus Financial Products will remain part of Primus Guaranty and will continue to be managed by Primus Financial portfolio managers.
Berkshire Capital Securities LLC acted as advisor to Primus on the sale of the CLO business. Corporate website: www.primusfinancial.com
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