Daily News: April 19, 2012

THL Credit to Acquire McDonnell’s Alternative Credit Strategies


THL Credit Advisors LLC, the credit affiliate of Thomas H. Lee Partners, L.P. and the external investment manager of publicly listed business development company THL Credit, Inc., announced that it has agreed to acquire Chicago-based McDonnell Investment Management, LLC’s Alternative Credit Strategies (ACS) group, a leading alternative senior debt credit manager.

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. 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 billion of assets under management and 46 employees following the closing of the transaction, which is subject to customary closing conditions.

“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. 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,” said James K. Hunt, CEO and CIO of THL Credit Advisors. “The ACS group’s highly experienced leadership team has worked together for 20 years and has demonstrated exceptional performance since they started the senior bank loan business which they originated at Stein Roe. The combination will allow THL Credit Advisors to leverage the industry knowledge and expertise of the ACS team with the existing middle market investment teams managing THL Credit, Inc. 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.”

Deutsche Bank Securities is serving as financial advisor to THL Credit Advisors. Colchester Partners is serving as financial advisor to McDonnell Investment Management.