Man Group has agreed a deal to acquire the $11.8bn (£9.2bn) AUM US private credit manager Varagon Capital Partners.
The firm will pay $183m (£143.3m) in cash to selling interest holders, which will be funded using “existing internal resources”.
Once the deal completes, Varagon CEO Walter Owens will continue to manage the firm which will be renamed ‘Man Varagon’.
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Varagon’s investment teams and processes will stay the same, while its strategies will have access to Man Group’s global distribution reach.
Subject to regulatory approval, Man Group said it expects the deal to complete in the third quarter of 2023.
Eric Burl, head of discretionary at Man Group, said: “This acquisition reflects our long-term strategy to move into new market segments where we can differentiate ourselves with talented, specialised teams.
“Man Group has built a rich and diversified credit offering to date, and as client demand for credit strategies is increasing, we see a significant growth opportunity in direct lending, particularly against the backdrop of regional banking difficulties in the U.S. This transaction enhances our ability to provide deep, fundamental credit expertise through a cycle, underpinned by risk management of the highest quality.”
Walter Owens, Varagon chief executive, added: “The private credit market continues to grow in relevance for many investors, and fundamental credit analysis and disciplined underwriting skills will come to the fore as the environment for borrowers in the U.S. becomes more challenging.
“We believe a combination of Man Group and Varagon will enable us to preserve our proven investment process while helping us scale our suite of products and continue to deliver compelling results to our clients and sponsor partners.”
In May, Man Group announced current group president Robyn Grew will succeed CEO Luke Ellis, who will step down from the role on 1 September.
The asset manager reported net inflows of $3.1bn (£2.56bn) for the 2022 calendar year, despite AUM dropping 4% to $143bn (£118bn).
