First Eagle Investment to acquire alternative credit manager THL Credit

THL Credit specialises in the management of tradable credit and direct lending to middle-market firms

First Eagle Investment Management, a New York-based investment management firm, has agreed to acquire THL Credit Advisors, an alternative credit manager, for an undisclosed price.

Based in Boston, THL Credit was established in 2007 as the credit affiliate of private equity firm Thomas H. Lee Partners. THL Credit’s primary credit underwriting office is located in Chicago.

The company held around $17bn in assets under management as of 30 September 2019.

The alternative credit manager is said to specialise in the management of tradable credit and direct lending to middle-market firms. The company’s direct lending and tradable credit investment strategies are said to invest in the entire capital structure via public and private vehicles, commingled funds including collateralised loan obligations (CLOs), and separately managed accounts.

First Eagle said that the acquisition of THL Credit complements its established alternative credit platform and will consolidate its position among the top providers in tradable credit as well as middle-market direct lending.

Furthermore, First Eagle said that the acquisition will broaden the range of differentiated investment solutions it provides to institutional and retail investors across the world. The acquisition is also expected to strengthen the company’s partnerships with financial professionals and borrowers, private equity sponsors, and investment banks.

THL Credit CEO Chris Flynn said: “Uniting the capabilities of THL Credit and First Eagle on a single platform will create a credit business with the scale and experience to further accelerate our leading position in market.

“The team at THL Credit is excited by the growth opportunities we can seize by joining First Eagle. We look forward to working together to continue to provide clients with a best-in-class product suite in alternative credit.”

Post-acquisition, First Eagle’s alternative credit platform will represent nearly $23bn in assets under management and advisement.

First Eagle CEO comments on THL Credit acquisition

First Eagle president and CEO Mehdi Mahmud said: “With best-in-class credit expertise and a creative, fiduciary-minded approach to developing investment solutions, THL Credit has built an excellent reputation in this structurally attractive space. We believe the combined platform represents a compelling value proposition for a broad spectrum of investors and other credit market participants.”

The transaction, which is subject to regulatory approvals and other customary closing conditions, is likely to be wrapped up in the first quarter of 2020.