THL Credit In Deal For $2.5B Firm

  • Expansion into syndicated lending
  • Team from ACS to join THL
  • Complementary to mid-market strategy

THL Credit Advisors LLC, the credit affiliate of Thomas H. Lee Partners, has agreed to acquire Chicago-based McDonnell Investment Management’s Alternative Credit Strategies group, a leading alternative senior debt credit manager, sister news service LPC reported.

ACS manages approximately $2.5 billion in broadly syndicated bank loan and high-yield bond assets in collateralized loan obligations, separate account, long-only and opportunistic fund formats. THL Credit Advisors is also the external investment manager of publicly listed business development company THL Credit Inc.

“The expansion of THL Credit Advisors’ investment capabilities into syndicated high yielding assets, including syndicated bank loans, is a natural extension of our direct lending middle market junior capital platform,” said James K. Hunt, CEO and CIO of THL Credit Advisors, in a statement. “These investment strategies are highly complementary to THL Credit Inc.’s middle market product, and the combination of the investment platforms adds significantly to THL Credit Advisors’ resources.”

Led by James R. Fellows, Brian W. Good, Robert J. Hickey and Michael A. Herzig, the ACS leadership team will join THL Credit Advisors’ capital markets investment business to create and lead THL Credit Senior Loan Strategies. THL Credit Advisors, together with THL Credit SLS and THL Credit Inc., will collectively have approximately $3.0 billion of assets under management and 46 employees following the closing of the transaction, which is subject to customary closing conditions.

“The transaction is compelling as we collectively benefit from a more scaled and integrated business that can draw on a greater resource base and the credit expertise of the entire THL platform,” said Hunt.

All existing ACS investment professionals and employees are expected to join THL Credit SLS. Following the closing, THL Credit SLS will continue to operate the ACS platform out of its Chicago area and New York offices.

(Leela Parker is a correspondent for Thomson Reuters LPC in New York.)