Published in London & New York
10 Queen Street Place, London
1345 Avenue of the Americas, New York
Creditflux is an
company
© Creditflux Ltd 2025. All rights reserved. Available by subscription only.
News
CLO manager M&A driven by search for talent and scale
by Lisa Lee
M&A is in the air. Colossal asset gatherer BlackRock, credit powerhouse Apollo Global Management, insurance behemoth MetLife, and billionaire Dan Loeb’s hedge fund Third Point have all engaged to purchase CLO shops in recent months.
The drivers for acquisition and consolidation are varied. But a trend is clear, and more M&As are anticipated in the CLO market.
“These are complicated deals with many layers to them,” said Andrew Lennox, CLO investor at Federated Hermes. “Are they buying to get scale? Where the CLO managers have different styles, which style wins out in the combined business? Does the acquired firm have their own equity to back issuance?”
In Apollo’s case, the tie-up between its Redding Ridge subsidiary and CLO specialist Irradiant Partners will boost the combination to a top five spot among CLO managers globally. Apollo will also add a highly-regarded team led by Michael Levitt, John Eanes and Jon Levinson (although not everyone at Irradiant will be heading over).
Which style wins out in the combined business?
Andrew Lennox
CLO investor
Federated Hermes
But teams don’t always move. When Sound Point Capital Management purchased Assured IM in 2023, senior portfolio manager Charles Kobayashi and his team did not come into the fold. Since the acquisition, Sound Point has managed the old Blue Mountain CLOs and they have come to look and trade more like Sound Point-issued deals, according to sources. (Sound Point did not comment on this story.)
For BlackRock, buying HPS Investment Partners transforms the firm into one of private credit’s most significant players. Meanwhile, MetLife is amping up its asset management business with PineBridge Investments’ USD 100bn of AUM.
“What we have seen in the past is that often acquirers are strong managers, so we are usually fine with M&A,” said Michael Schewitz, investor at Investec. “But we seek investment diversity — a range of managers. So you do hope that the universe of managers doesn’t shrink too much, which I think is unlikely.”
M&A also offers an opportunity for regional expansion. Investcorp acquired Marble Point Credit to gain a larger presence in the US market. Since November 2023, the US Investcorp platform has completed 15 CLO deals, although one of the Marble Point deals is PIKing, according to sources.
The increase in LMEs is also encouraging managers to seek acquisitions, said Dan Wohlberg, Principal at Eagle Point Credit. “Many CLO collateral managers are looking to increase scale to improve their ability to chart their own path,” he added.
