A private equity-backed mutual fund firm in Gotham is buying in Beantown.

Mehdi Asif Mahmud First Eagle Investment Management, LLC President, CEO

First Eagle Investment Management, a New York based investment manager that is backed by Blackstone and Corsair Capital, will be acquiring THL Credit, a alternative credit manager. First Eagle currently has approximately $99 billion in AUM, while THL has approximately $17 billion in AUM. Post acquisition, First Eagle's alternative credit platform will have approximately $23 billion in assets under management and advisement.

THL was originally established as the credit affiliate of Thomas H. Lee Partners LP, a private equity company. THL is based in Boston and specializes in managing tradable credit and direct lending to middle-market companies through public and private vehicles, as well as managed accounts and commingled funds.

The deal, pricing and terms of which were not disclosed, is expected to close in early 2020.

Mehdi Mahmud, president and chief executive officer of First Eagle, stated:

We see a persistent need in the market for meaningful and sustainable sources of income. Alternative credit strategies that invest in tradable credit and directly originated middle-market loans help address this need, offering investors the potential for material income streams and compelling risk-adjusted total returns across business cycles and interest rate environments. With best-in-class credit expertise and a creative, fiduciary-minded approach to developing investment solutions, THL Credit has built an excellent reputation in this structurally attractive space.

"Uniting the capabilities of THL Credit and First Eagle on a single platform will create a credit business with the scale and experience to further accelerate our leading position in today’s market," stated THL Credit CEO Chris Flynn.

A spokesperson from First Eagle tells MFWire:

THL Credit Chief Executive Officer Chris Flynn will oversee the combined alternative credit platform as President, reporting to First Eagle President and CEO Mehdi Mahmud. THL Credit Chief Investment Officer Jim Fellows will become CIO of the new platform and serve on the investment committees for both tradable credit and middle-market direct lending. Tim Conway, Head of Private Credit at First Eagle, will become Vice Chairman, charged with helping to ensure the smooth integration of the two platforms and continuity for all stakeholders.

The advisor for First Eagle is BofA Securities, with Goodwin Procter as legal counsel. Sandler O'Neill + Partners, LP is working as THL Credit's financial advisor, and legal counsel came from Weil, Gotshal & Manges LLP as well as Winston & Strawn LLP. 

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