Fortress To Sell Logan Circle Partners To MetLife

Jul 10 2017 | 5:45pm ET

Alternative investment management giant Fortress Investment Group has reportedly agreed to divest its Logan Circle fixed income asset management division to insurance and financial services company MetLife.

Consideration for the deal is approximately $250 million in cash, according to joint statement issued by the two firms on Friday. The transaction is subject to customary closing conditions and regulatory approvals, and is expected to close in the third quarter.

The addition of Logan Circle would bring MetLife’s Investment Management business to more than $560 billion in total assets under management, of which more than $140 billion would be managed on behalf of third parties, the statement continued. 

News that Fortress was mulling the sale of the fixed-income unit first came last April. Although Logan Circle accounts for nearly half of Fortress’ $69 billion in AUM, it contributes on a small portion towards the company’s pre-tax profits. This mismatch may have flagged Logan Circle as a non-core asset to Japan’s Softbank, which agreed to buy Fortress last February for $3.3 billion. 

Moelis & Co served as financial adviser and Morgan, Lewis & Bockius as legal adviser to MetLife, while Bank of America Corp and Skadden Arps were the respective advisers to Fortress, the statement said.

Logan Circle was formed by Jude Driscoll in 2007 as a joint venture between the fund’s management and Guggenheim Partners LLC and was bought by Fortress in 2010 for an initial $21 million. The company is a fundamental research-based fixed-income investment manager with more than 100 institutional clients and more than $33 billion in assets under management as of March 31, 2017. 

Founded in 1998 by Wesley Edens, Randal Nardone and Robert Kauffman, Fortress manages more than $70 billion across a number of alternative investment strategies as of March 31, 2017. It was the first private equity and hedge fund manager to sell shares to the public and manages assets on behalf of more than 1,750 institutional clients and private investors worldwide.

MetLife is one of the largest life insurance companies in the world. Founded in 1868, the company provides life insurance, annuities, employee benefits and asset management for approximately 100 million customers in nearly 50 countries. 

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