Monday, November 21, 2011

Carlyle Launches New Churchill

WSJ reported The Carlyle Group's "acquisition of the management team of debt provider Churchill Financial LLC from private-equity firm Olympus Partners".

Carlyle is getting a 13-person team and "fee income and a platform to build upon," said a person familiar with the deal. The team will continue to manage a $1.25 billion collateralized loan obligation, the equity of which is owned by Churchill Financial Group, which remains a portfolio company of Olympus.
Here's Fortune's take:

Rob Morris of Olympus:  "We were not selling the equity. This was basically a process to outsource the admin function... once we received a multiple step upgrade on ratings from agencies in September the reinvestment period on the CLO effectively was locked in, so this was the next move to let the team go build another lending business while our fully invested CLO stayed managed at a lower cost by the same team."

Think of Carlyle's deal as launching New CLO Coke, with Coca CLO Classic remaining, only old Coke has ingredients from Bear Stearns.

As an aside, everyone wants to be Churchill nowadays.  Carlyle can claim the Limited Liability Corp version.