- LibreMax Capital acquired Trimaran Advisors and related CLO management units from KCAP Financial for about USD 37.9 million in cash, closing on December 31, 2018.
- The deal adds Trimaran’s six CLOs with roughly USD 3 billion in AUM to LibreMax’s structured credit platform and more than doubles LibreMax’s total assets under management.
- Trimaran’s CIO Dominick Mazzitelli and the existing management team remain in place, preserving expertise and continuity in CLO structuring and relationships.
- The transaction expands LibreMax’s exposure to CLO fee income and leveraged loan risk, while allowing KCAP to refocus on middle market lending and simplify its BDC structure.
Read More
The 2018 transaction in which LibreMax Capital acquired Trimaran Advisors and affiliated subsidiaries from KCAP Financial represents a strategic expansion of LibreMax’s platform into CLO management. Priced at approximately USD 37.9 million in cash, the deal was structured to bring together Trimaran’s established CLO franchise — with six CLOs under management and about USD 3 billion in assets — into LibreMax’s existing structured credit expertise.[4][9]
The retention of Dominick Mazzitelli and the existing management team is significant: it preserves continuity in CLO structuring, relationships, and underwriting, which are essential in managing CLO liabilities and navigating resets or market cycles. [4][9]
From a financial perspective, the deal not only bought assets but capability: LibreMax more than doubled its AUM from ~USD 2.9 billion pre-deal to nearly USD 5.9 billion post-deal, enhancing scale in CLO exposure and likely improving operating leverage. [4][9]
Strategically, this move positioned LibreMax to benefit from the income streams and fee waterfalls of CLO equity and income tranches, and to capitalize on volatility in the CLO market (resets, credit spreads, default risk) — all while leveraging an existing management team. For KCAP, the divestiture allowed refocusing on middle market lending and simplifying its BDC structure.[9]
Risk implications include exposure to loan default risk during downturns, repricing risk if interest rates rise sharply, and reputational risk associated with losses in CLO portfolios. LibreMax’s ability to manage hedging, structure CLO tranches, and oversee risk metrics is central to success.
Open questions include: What has been the performance post-acquisition of the acquired CLOs vs. LibreMax’s legacy structured credit book? How has LibreMax managed integration costs and strengthened risk control? What is the current asset base of the Trimaran platform and how has the business scaled since 2018?
Supporting Notes
- LibreMax paid USD 37.9 million in cash to acquire Trimaran Advisors and related subsidiaries from KCAP Financial; deal closed December 31, 2018.
- Trimaran oversaw six CLOs with approximately USD 3 billion of assets under management as of the time of the acquisition. [4][9]
- Dominick Mazzitelli continues to lead Trimaran’s CLO platform under LibreMax, along with its existing management. [4][9]
- LibreMax pre-deal AUM was about USD 2.9 billion; the acquisition more than doubled its scale and expanded its core strategies. [4][9]
- KCAP’s rationale: selling CLO asset management business to refocus on middle market lending, while LibreMax aimed to grow its CLO management platform.[9]
- Specific CLO deal cited: Trimaran’s “Catamaran 2018-1” CLO, ~USD 407.6 million, priced in September through Credit Suisse. [9]
Sources
- www.globenewswire.com (GlobeNewswire) — November 09, 2018
- [9] asreport.americanbanker.com (Asset Securitization Report) — November 12, 2018
- [4] newyork.citybuzz.co (citybuzz / Business Wire) — November 09, 2018
- [11] www.bloomberg.com (Bloomberg) — November 09, 2018
- [6] app.mergerlinks.com (MergerLinks) — November 09, 2018
- [8] www.sec.gov (SEC.gov) — February 26, 2019