Sound Point Capital Management LP, a credit-oriented investment management firm, has acquired the U.S. direct lending platform of CVC Credit.
Terms of the transaction were not disclosed. As part of the agreement, Sound Point has hired a team of nine investment professionals from CVC Credit who together manage a portfolio of approximately $1 billion of assets. The team primarily provides first lien and unitranche debt facilities to U.S. middle-market companies. Borrowers have included companies in a wide variety of industry sectors, including consumer services, business services, health care, pharmaceuticals, hospitality, telecommunications, industrials and other sectors.
“We are thrilled to add this investment portfolio and talented team of individuals to our organization,” said Stephen Ketchum, founder and managing partner of Sound Point Capital. “This transaction brings another dimension to our already successful lending platform and positions us for further growth.”
The nine-person CVC team is led by Tom Newberry, global head of private debt at CVC Credit, and David DeSantis, head of U.S. private debt at CVC Credit. Newberry and DeSantis have each been named co-heads of Direct Lending at Sound Point.
“Sound Point’s credit platform is the ideal home for a group like ours,” commented Newberry. “We see this as a way to accelerate the growth of our business and widen our underwriting capabilities through future expansion.”
Added DeSantis, “Combining our team’s proven track record with Sound Point’s deep connectivity amongst institutional investors sets up a powerful alliance.”
“The prevalence of so-called ‘non-bank lending’ in recent years is widely known,” Ketchum continued. “As traditional banks have shied away from certain areas of the market, firms like Sound Point have been able to successfully deploy capital with strong principal protection, providing attractive floating-rate returns to investors. Adding Tom, David and their entire team to our 100-person firm will help supercharge our efforts in this line of business.”
Ken Young, chair of CVC Credit, commented, “Following a strategic review in 2020, we decided to sell our US Direct Lending business. We are delighted to announce the sale to Sound Point and we wish Tom, David and all the team our best. Following this sale, we are highly focused on further accelerating the growth of CVC Credit across our three key areas: Performing Credit, European Direct Lending and Capital Solutions to ensure CVC Credit is ever more aligned with the CVC Network.”
Berkshire Global Advisors served as financial advisor to CVC Credit on this transaction.