Mount Logan Capital, along with Sierra Crest Investment Management (SCIM), has signed a definitive agreement to acquire certain assets from Resource America.
Under the agreement, which is subject to certain approvals, US-based SCIM will become the investment adviser of the Resource Credit Income Fund (CIF).
A US-based, continuously offered, closed-end interval fund, CIF has around $240m of assets under management as of 31 May 2020.
It invests across credit markets including private credit, public credit, and direct credit.
The deal expands Canada-based Mount Logan’s business into the non-traded retail channel, offering it a new growth channel.
Assets of the fund complements Mount Logan’s current portfolio, investment mandate, and experience.
The deal, which is subject to approval by the shareholders of CIF, is expected to close in Q4 2020.
Mount Logan CEO and chairman Ted Goldthorpe said: “This is a monumental step for Mount Logan in expanding our business to include the economic benefits associated with the management of a large, semi-permanent portfolio of third-party capital.
“Accordingly, the company will begin to benefit from meaningful, low volatility, recurring asset management fee streams.
“We believe the proposed transaction will be highly accretive for Mount Logan and we look forward to maintaining Resource’s momentum with the Fund and further complementing the new fund management with our investment track record and sourcing capabilities.”
Resource CEO Alan Feldman said: “We are pleased to enter into this transaction with Mount Logan and Sierra Crest Investment Management.
“Their extensive expertise in the credit markets makes CIF a strategic addition to their existing portfolio and we believe it will be synergistic with their overall experience and investment mandate.”
The deal is expected to retain existing key management members and vendor contracts of the fund for a seamless transition.