Assured Guaranty completes transfer of asset management business
Bermuda-based financial guaranty insurer Assured Guaranty today announced it has completed the transfer of substantially all of its asset management business with Sound Point Capital Management.
Assured Guaranty takes a 30% stake in Sound Point.
As part of the transaction, Assured Guaranty has contributed its entire equity interest in Assured Investment Management LLC and, with certain assets connected to Assured Health Partners, its related asset management entities to Sound Point.
US insurers Assured Guaranty Municipal and Assured Guaranty will also use Sound Point as their sole alternative credit manager to invest $1 billion over time in alternative credit strategies managed by Sound Point, is now effective; this amount includes the approximately $400 million that was previously managed by AssuredIM.
Assured Guaranty received a 30% ownership interest in Sound Point’s combined business, subject to potential post-closing adjustments. Assured Guaranty said it expects the transaction to be immediately accretive to its earnings per share, return on equity and book value per share, as well as its adjusted operating shareholders’ equity per share and adjusted book value per share.
With the combination of assets, Sound Point becomes the fifth largest global collateralised loan obligation manager by assets under management.
Dominic Frederico (pictured), president and chief executive officer of Assured Guaranty, said: “As we said when we first announced this arrangement in April of this year, we expect this transaction to significantly benefit both Assured Guaranty and Sound Point and to be accretive to Assured Guaranty’s shareholders.
“Our investment in Sound Point should provide significant incremental value as we expect the combined business will benefit from Sound Point’s scaled investment platform, as well as both firms’ established distribution channels and well-earned reputations for generating attractive returns for their investors.”
He added: “Our 30% investment in the combined firm advances our earnings diversification strategy through a compelling asset management business that we believe will grow and generate significant net income and free cash flow. We believe that Sound Point’s proven track record managing investments will be strengthened by the addition of AssuredIM.”
Frederico has joined the Sound Point Board of Managers.
