Assured Guaranty US Holdings completes acquisition of BlueMountain

02-10-2019

Assured Guaranty US Holdings has completed the acquisition of alternative asset management firm BlueMountain Capital Management. 

The deal was completed on substantially the same terms that had been disclosed in August, including the purchase of all BlueMountain’s equity interests for approximately $160 million, which was paid in cash. Of that, $3 million is being withheld and will be paid if a particular consent is received within the two months following the closing.

Dominic Frederico, president and CEO of Assured Guaranty, said the two firms were culturally compatible, with complementary strengths. For example, BlueMountain has an established presence in the collateralised loan obligation (CLO) market, and a fee-based revenue source that complements Assured Guaranty’s risk-based premium revenues, he said. 

“We expect it to significantly benefit Assured Guaranty’s shareholders and policyholders by furthering our goal of leveraging our capital through business diversification, while continuing our share repurchase program and supporting growth at BlueMountain,” said Frederico. 

The deal will also facilitate BlueMountain’s growth through an infusion of working capital and an allocation of Assured Guaranty’s investment portfolio to its managed investment vehicles, he added. 

BlueMountain is an alternative asset management firm with $18.9 billion in assets under management.

Andrew Feldstein, a co-founder of BlueMountain, has joined Assured Guaranty as chief investment officer and head of asset management, while remaining chief executive officer and chief investment officer of BlueMountain. Separately, he agreed to purchase $22.5 million of Assured Guaranty common shares during the course of the next two months to evidence his commitment to Assured Guaranty. 

Feldstein said: “By becoming a member company of the Assured Guaranty group, BlueMountain has gained greater financial stability and duration of capital, along with access to the experience and strategic outlook of the long-time leader in its credit-intensive market. We intend to expand Assured Guaranty’s asset management capabilities and to make the most of the synergies inherent in our companies’ mutual strengths in credit, asset-backed finance, infrastructure and healthcare.”

Assured Guaranty, BlieMountain Capital Management, Dominic Frederico, Andrew Feldstein

Bermuda Re