Sun Life to buy majority stake in U.S. alternative credit manager

Sun Life Financial Inc. has announced it intends to acquire a majority stake in Crescent Capital Group LP, a global alternative credit investment manager headquartered in Los Angeles.inves

Crescent has about US$28 billion in assets under management and offices in New York, Boston and London, with more than 180 partners and employees.

Crescent will form part of SLC Management, Sun Life's alternatives asset management business, extending its solutions in alternative credit.

This transaction will support the expansion of existing and new, adjacent strategies for the benefit of both firms, and enable Crescent to meet the growing needs of its institutional client base, allocating more capital to alternative credit in search of yield, says Sun Life.

Upfront payment of US$276 million

Sun Life will acquire a 51 per cent interest in Crescent for up to US$338 million, consisting of an upfront payment of US$276 million and a future payment of up to US$62 million based on the achievement of certain milestones.

Crescent will continue to operate independently under its current leadership and will retain its brand, office locations and clients.

Founded in 1991, Crescent is one of the longest tenured credit managers in the industry, providing middle-market direct lending in the U.S. and Europe, high-yield bonds and syndicated loans.

Sun Life has committed to co-invest up to US$750 million in Crescent's investment strategies, supporting the launch of new products and creating alignment with Crescent's investors.

Clients to get new investment strategies

"With our longstanding investment track record, we look forward to further 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 Group LP.

"We've been looking to expand our alternative credit capabilities for some time now, offering our clients a broader, deeper array of investment solutions across the public and private credit markets, infrastructure, real estate equity and debt," said Steve Peacher, president, SLC Management.

The transaction is expected to close in late 2020, subject to receipt of regulatory approvals and satisfaction of customary closing conditions. Upon completion of the transaction, Crescent is expected to become a majority-owned subsidiary of SLC Management and, subject to the approval of Crescent BDC's shareholders, remain the investment advisor of Crescent BDC.