Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Janus Henderson has struck a deal to take control of a $6bn alternative investments firm in the latest push by a traditional asset manager to add private credit capabilities to meet growing investor demand.
The British-American group, which has about $361bn in assets under management, is acquiring a 55 per cent stake in Chicago-based Victory Park Capital Advisors in exchange for cash and company stock, with a “defined path” to take total ownership eventually, the company said on Monday. Financial terms of the deal were not disclosed.
The deal for Victory Park, which has about $6bn in assets under management, comes on the heels of Janus Henderson’s pact to acquire the alternative investments arm of the National Bank of Kuwait, a deal that also is expected to close by the end of the year. Janus and other asset managers are racing to add a broader range of sought-after private credit investment opportunities.
“Asset-backed lending has emerged as a significant market opportunity within private credit, as clients increasingly look to diversify their private credit exposure beyond only direct lending,” Janus Henderson chief executive Ali Dibadj said. “VPC’s investment capabilities in private credit and deep expertise in insurance align with the growing needs of our clients, further our strategic objective to diversify where we have the right, and amplify our existing strengths in securitised finance.”
Janus Henderson’s stock rose about 1.2 per cent during lunchtime New York trading on Monday after the deal was announced and is up more than 15 per cent year-to-date.
Alternative investments such as private credit, infrastructure and real estate have continued to pique the interest of affluent retail investors who historically have struggled to gain access to such strategies, which remain one of the top areas of interest for wealthy investors, according to a mid-year report from consultancy PwC.
“The industry has made significant progress in making the private markets more available to retail investors,” PwC’s report said. “Continued success will probably depend on an efficient secondary market through technology or exchanges that enables retail investors to freely and cost-effectively trade, as well as gain broader access to fund managers.”
In recent years, Janus Henderson has grown into a major player in the world of active securitised exchange traded funds. It runs the largest collateralised loan obligation (CLO) ETF and the biggest active mortgage-backed securities ETF, overseeing more than $15bn between the two funds.
The largest asset manager in the world, BlackRock, earlier this year made waves with its $12.5bn acquisition of Global Infrastructure Partners, and Europe’s largest asset manager, Amundi, announced in February it was planning to buy Alpha Associates, a private markets specialist.
Deals between large legacy asset managers and smaller specialists rest on the ability of the latter’s strategies to find footholds in bigger markets through the former’s distribution networks.
Richard Levy, Victory Park Capital chief executive and founder, said: “This partnership is a testament to the strength of our established brand in private credit and differentiated expertise, and we believe it will enable us to scale faster, diversify our product offering, expand our distribution and geographic reach, and bolster our proprietary origination channels.”
Read the full article here
