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Clearlake Capital has struck a deal to buy an investment unit from Natixis that will push the private equity firm into the burgeoning private credit industry, as asset managers jostle for an entry point in the fast growing space.
Clearlake, a co-owner of the English Premier League club Chelsea FC, has agreed to acquire European-focused credit investment shop MV Credit for several hundred million dollars, according to people briefed on the matter.
The deal will take Clearklake’s assets under management to more than $90bn and expand its credit business by roughly $5bn.
The takeover comes as both private equity firms and traditional asset managers look to gain a toehold in the $1.7tn private credit industry, spending lavishly to acquire investment shops and build out their own offerings.
The purchase of MV Credit will put Santa Monica, California-based Clearlake in the $800bn so-called direct lending market, where asset managers sidestep banks to make loans privately to companies.
It will also bolster Clearlake’s public credit investment team with the addition of MV’s collateralised loan obligation business.
Clearlake is one of the fastest growing private equity firms; it managed less than $2bn a decade ago. It invested heavily in 2020 and 2021, and like other buyout shops, its portfolio is now being tested by higher interest rates.
The firm has used previous downturns to invest in distressed debt — its co-founders have roots investing in space and in corporate turnarounds — and Clearlake has been steadily building its credit offerings.
In 2020 it bought WhiteStar Asset Management, a manager of CLOs. In 2022 it lost out in a bid to buy CBAM, a credit manager then owned by Todd Boehly’s Eldridge Industries.
The auction for CBAM ultimately brought Clearlake and Boehly close together, with the pair joining forces to buy Chelsea in 2022.
“When we expanded into credit it . . . made us better investors,” José E Feliciano, a co-founder of Clearlake, told the Financial Times. “Oftentimes for us the credit business has been the canary in the coal mine . . . which has a direct effect on our private equity business.”
Feliciano said Clearlake had explored other credit acquisitions in recent years. He added that the firm planned to expand MV’s direct lending business, which could include new funds or permanent capital vehicles, and eventually broaden its footprint to the US.
“It positions us much better in a fast growing part of the market and gives us a broader presence in Europe,” he said. “Most importantly it makes us more relevant to our [investors]. We have yet another arrow in the quiver.”
Clearlake is funding the acquisition with cash on hand as well as through its revolving credit facility. The firm had previously raised capital by selling a stake in its business to Dyal Capital — now a part of Blue Owl — and Goldman Sachs’ Petershill Partners private equity unit.
Consolidation in the asset management industry has been rampant, with traditional private equity firms bulking up in infrastructure and credit as they look to build steady fee-generating businesses.
Private equity group TPG bought credit investment firm Angelo Gordon last year. Earlier this year Blue Owl announced a deal to buy Atalaya Capital Management for $450mn, months after Brookfield said it would invest $1.5bn to buy a majority stake in aviation-focused lender Castlelake.
Roughly $32bn of takeovers in the asset management industry have been struck already this year, according to data provider LSEG.
Demand for private credit has remained unsated, offsetting the lower demand for traditional buyout funds. Investors have been drawn by the relatively high yields on offer, which are often marketed to exceed 10 per cent or more.
“The demand for private credit keeps growing, and the partnership with Clearlake allows us to further address client needs around the world,” MV chief executive Frédéric Nadal said.
Natixis declined to comment.
