Price: $1.3 billion
Buyer: Sankaty Advisors
Seller: JPMorgan Global Special Opportunities Group
Legal Counsel: Kirkland & Ellis, Davis Polk & Wardwell
European assets make up 40 percent of the portfolio’s value, with Asian assets constituting another 30 percent. The balance of the portfolio is made up of North American, Australian and New Zealand assets, Sankaty Managing Director Jeff Robinson told Buyouts.
The firm will use investment capital from Sankaty Credit Opportunities Fund V and Sankaty Middle Market Opportunities Fund II to acquire the JPMorgan’s portfolio, Robinson said. Credit Opportunities Fund V, a 2012 vintage poll with $3.5 billion of capital commitments, is roughly 50 percent invested, he said. The firm closed Middle Market Opportunities Fund II on $1.4 billion in December.
The firm used both fund families to make similar acquisitions in March when it announced plans to purchase portfolios owned by Lloyds Banking Group, CapitalSource Finance and Irish Bank Resolution Capital. Unlike Sankaty’s earlier deals, however, JPMorgan was not selling from a distressed position, Robinson said.
“I don’t think we approached them any differently in terms of how we bid,” he said. “The aggregated price of the risk is appropriate for our funds. We don’t set out trying to reverse engineer, or work backward, into the fund strategy. The process on this was no different.”
Sankaty formed its bid by assigning each asset to one of its industry verticals, then determining a price according to relative risk. The final $1.3 billion net asset value was an aggregation of the risk pricing effort. Robinson characterized the portfolio as “reasonably well performing.”
Kirkland & Ellis provided legal counsel to Sankaty. JPMorgan was counseled by Davis Polk & Wardwell, according to the announcement.
Sankaty was founded in 1998 and manages $24 billion of assets. The firm maintains offices in Boston, New York, Chicago, London, Luxembourg and Melbourne.
(An earlier version of this story characterized the portfolio as being comprised of mezzanine loans. The portfolio also includes other securities and special situations assets.)