Investcorp Credit Management is reportedly holding acquisition talks with several credit firms to expand its US footprint.
The move is part of the Bahrain-based alternative asset manager’s strategy to expand its collateralised loan obligation business.
A potential deal is part of Investcorp’s plan to become one of the top global CLO shops by assets under management (AuM), Bloomberg reported citing Investcorp US credit management co-head David Moffitt.
Moffitt said that the company is eyeing firms with AuM between $3bn to $10bn.
“We are in active discussions with a number of multi-asset credit platforms that have CLO,” he divulged to the news agency.
CLOs purchases leveraged loans and re-bundle them into bonds of diverse risk and return. It also offers floating rates, providing protection against resurgent inflation.
Moffitt also said that Investcorp is looking to grow its some $5bn US CLO business through $1bn to $1.5bn of annual organic growth, targeting assets of roughly $10bn in the next few years
Any deal could easily increase that amount to $15bn, he added.
The US division is looking to hire two or three credit analysts to support the company’s growth plan.
It plans to add at least one new analyst for every two deals in the future, and one senior portfolio manager for every three deals.
Moffitt added: “We are in active discussions with a number of potential capital partners who can allow us to further leverage our balance sheet and other pools of capital in growing the CLO platform.”
In addition to its aspiration in the CLO segment, Investcorp is also planning to expand its presence in other segments of credit.
The firm is working to establish a credit risk transfer business. It also planning to launch a CLO trading business in the first quarter of the next year.
Moffitt said: “What we’re trying to build is a multifaceted asset-management platform in the credit space.
“We have to get the credit business right in the US since it is the biggest credit market in the world, and supports our growth plans as a significant global player.”
In December last year, Investcorp acquired a minority stake in US-based private equity firm Centre Lane Partners.