Heat Wave: Dechert Financial Services M&A Team’s Busy Summer

Labor Day is past and the mercury may be falling, but Dechert’s summer-long wave of financial services M&A deals shows no sign of cooling off. Over the last three months, the firm’s financial services M&A team has advised on more than a dozen transactions.

"This summer's deal flow reflects the broader convergence between traditional and alternative asset management — public and private capital blending across wealth, insurance and institutional channels alike," said Ken Young, co-head of Dechert's corporate practice. "Clients need counsel who can move seamlessly across M&A, funds, finance and regulatory work, and our team has been at the center of that for years — this summer just turned up the heat."

"Scale continues to be a throughline," added Steve Pratt, Dechert M&A partner and a leader of Dechert’s financial services M&A practice. "Asset managers are structuring deals to build out capabilities, add new products and move into adjacent areas — it is a dynamic that has not slowed down, and if anything, has accelerated in recent months."

Some examples of the financial services M&A transactions on which we have advised this summer include the:

• Sale by Toorak Capital Partners and KKR of Toorak's operating platform and US$3 billion existing portfolio of business-purpose loans to Velocity Financial, Inc. and a third-party investment firm, respectively. Since its founding in 2016, Toorak has funded more than US$20 billion across nearly 43,000 loans and has built a leading business-purpose lending and asset management platform.
• Proposed acquisition by T. Rowe Price Group, Inc., a global investment management firm, of F/m Investments LLC, a fixed income asset manager and ETF specialist with approximately US$19 billion in assets under management. The acquisition is expected to expand T. Rowe Price's fixed income capabilities, accelerate growth across its ETF franchise and broaden its liquidity, cash management and customized fixed income offerings. The transaction also reflects T. Rowe Price’s disciplined approach to acquisitions and partnerships that strengthen its investment capabilities and expand scalable solutions for clients.
• Acquisition by Mount Logan Capital Inc. and the Opportunistic Credit Interval Fund, a fund managed by Mount Logan’s wholly owned registered investment advisor Mount Logan Management, LLC, of substantially all of the assets of Yieldstreet Alternative Income Fund Inc. (YS AIF). In connection with the acquisition, Mount Logan has also entered into a Transition Services Agreement with Willow Asset Management LLC, the advisor of YS AIF, for access to certain books and records of YS AIF.
• An important transaction involving Clearlake Credit, the credit platform of global investment firm Clearlake Capital Group, L.P., that will see it assume management of CLOs previously managed by LCM Asset Management, LLC. The deal brings 31 CLOs and more than US$5 billion of assets under management into the Clearlake fold — increasing Clearlake Credit's total AUM to approximately US$39 billion.
• Acquisition by Aberdeen Investments, a global specialist asset manager, of closed-end fund assets from MFS Investment Management, with combined assets totaling approximately £1.5 billion. The transaction marks Aberdeen’s 10th U.S. closed-end fund acquisition since 2000, further reinforcing its position as one of the leading global managers of closed-end funds.
• Joint venture between Ontario Teachers’ Pension Plan, a leading global institutional investor, and M&G Investments to support the scaling of a multi-billion European CLO platform. The transaction combines M&G's track record, in-house credit research and investment expertise with Ontario Teachers’ institutional CLO investment experience and capital.
• An agreement by The Guardian Life Insurance Company of America to transition approximately US$4.5 billion in separate account assets into mutual funds advised by SunAmerica Asset Management, LLC, a subsidiary of Venerable Holdings, Inc. Under the proposed structure, the in-scope assets currently held in Guardian's variable products trust will be reorganized through a series of fund mergers into a variable insurance mutual fund trust.
• Acquisition by Pantheon, a global leader in private credit secondaries, of approximately US$523 million in private credit investments from BlackRock TCP Capital Corp., a Nasdaq-listed business development company, through a newly formed continuation vehicle in which TCPC retained a 5% interest. The transaction reflects the continued growth of the private-credit secondaries market, where nonbank lenders increasingly use continuation vehicles and portfolio sales to manage their balance sheets and provide liquidity.
• Proposed sale of The Hartford Funds, a leading provider of investment solutions for the wealth management market to Wellington Management, on which Dechert acted as investment management regulatory counsel. Upon closing, Hartford Funds will be integrated into Wellington’s U.S. Wealth business. This transaction will allow Wellington to offer financial advisors and investors broader access to investment capabilities, a deeper distribution platform, and more integrated support across the U.S. wealth management landscape.
• An agreement by Pretium to bring Cascade Financial Services onto their lending platform. Pretium is a specialized investment firm managing more than US$70 billion in assets. The addition of Cascade, a specialized independent lender, will enable Pretium to expand its lending to prospective purchasers of manufactured homes.

About Financial Services M&A at Dechert

Dechert is among the world’s most active law firms in advising financial services companies and industry participants on complex and innovative mergers and acquisitions, many of which have been recognized for significantly impacting the global deal economy. We handle the full range of financial services deals, from public M&A transactions to minority stakes in investment advisers, to bespoke joint ventures and assistance with asset purchases that typically accompany fund reorganization transactions, as well as GP stakes and secondaries transactions, and the creation of private credit platforms.

Dechert has been top-ranked by the most prominent league tables, industry publications, and legal directories for its M&A, investment funds, private equity, real estate, and collateralized loan obligation (CLO) practices, including Bloomberg, Creditflux, Mergermarket, PitchBook, Refinitiv, Secondaries Investor, The Deal, Chambers and Partners, The Legal 500, and IFLR1000.