Sector developments and company hires

Injunction sought over Blue Owl combination
Golub Capital Partners, one of 17 partner managers in the Dyal Capital Partners IV fund, has brought a lawsuit against the fund, Neuberger Berman Group (NBG) and NB Alternatives Advisers, seeking an injunction against the Blue Owl transaction (SCI 4 December 2020). Sixth Street previously filed a lawsuit against the Dyal Capital Partners III fund and NBG, which was brought on similar - and what Dyal strongly believes to be incorrect - contractual claims.

Dyal says it does not believe that Golub’s suit has merit and that it will defend Fund IV vigorously against the claims. “We believe these lawsuits represent an effort by Sixth Street and Golub to hold the [Blue Owl] transaction hostage, as a way to seek the buyback of the investments at an unfair price, which would be harmful to the applicable Dyal fund,” the firm says.

It adds that, contrary to Golub’s assertions, it has attempted repeatedly over the last three months to address Golub’s stated concerns regarding information security, the business services platform (BSP) and governance of Blue Owl post-transaction. Following productive engagement with other partner managers, Dyal notes that it has crafted a robust information control policy and pre-emptively decided that the BSP will sit separately from the direct lending dedicated personnel. Furthermore, the Dyal team will continue to operate autonomously regarding investments and Dyal’s partner managers.

Dyal also stresses that Fund III and Fund IV will continue to own precisely the same economic interests and remain contractually entitled to the same share of Sixth Street’s and Golub’s profits as they did prior to the transaction.

The firm says it continues to be open to good-faith discussions with Sixth Street and Golub to resolve these matters and continues to believe that the merits of the Blue Owl strategic combination are powerful.

A definitive business combination agreement was signed on 23 December between Owl Rock Capital Group and Dyal and Altimar Acquisition Corporation to form Blue Owl Capital, an alternative asset management firm with over US$45bn in assets under management. The agreement involves Blue Owl entering the public market through a business combination with Altimar, a SPAC sponsored by an affiliate of HPS Investment Partners.

The new firm’s main business will focus on direct lending and GP capital solutions. Doug Ostrover, co-founder of Owl Rock, will serve as ceo of Blue Owl. Dyal founder Michael Rees and Owl Rock co-founder Marc Lipschultz will be co-presidents of the combined firm.

Upon completion of the transaction, Blue Owl will be a stand-alone firm, with Owl Rock and Dyal founders - alongside Neuberger Berman - owning meaningful equity positions in it. Dyal says it believes that the majority of its investors, partner managers and other key stakeholders support the transaction and are moving towards an expected closing in 1H21.

In other news…

Call for change at CIB Marine
Hildene Capital Management has nominated two director candidates for election to the CIB Marine Bancshares board, in connection with the company’s 2021 annual shareholder meeting. Funds managed by Hildene beneficially own 36% of each of the company’s series A and series B preferred stock, in the aggregate, as well as approximately 0.10% of the company’s common stock via its investments in Trups CDOs.

Hildene has also issued an open letter to CIB Marine shareholders outlining why immediate change is required to the company’s board and capital structure in order to maximise shareholder value. The letter highlights persistent underperformance, poor corporate governance and lack of board oversight at the company.

Hildene believes its nominees have the financial acumen and expertise needed to implement a recapitalisation plan in the best interests of all shareholders. The firm says it approached CIB Marine privately in November 2020 with a plan designed to optimise its capital structure for the benefit of all CIB Marine stakeholders, but the proposal was dismissed.

Hildene’s director candidates are John Scannell and Raymond Tellini. Scannell is senior advisor of Hildene, having previously held the positions of coo, chief compliance officer and general counsel during his tenure at the firm.

Tellini is the co-cio of Delta Capital Management Partners and has over seven years of experience investing in litigation finance opportunities that generated recoveries of over US$35m. Prior to joining Delta in 2016, he worked at Brennecke Partners and Palladin Group, among other firms.

CMBS traffic data offered
Geolocation data provider Advan Research Corporation has launched a CMBS foot traffic counts product. Daily visitors, employees, residents and dwell times on every CMBS property are now available on Advan’s FiT terminal and as data feeds. The traffic data is a clear leading indicator of CMBS spreads, which were provided by Solve Advisors for testing. CMBS investors normally have to wait three months or longer to obtain the NOI of the properties in each CMBS deal; Advan’s foot traffic and employee counts are expected to provide the same visibility with a one day lag.

Financing partnership formed
An affiliate of Peak Rock Capital has partnered with Neptune Financial to expand capital access and provide financing solutions to middle market and growth-oriented businesses. Peak Rock's flexible capital base and investment expertise will be combined with NepFin's business intelligence and sourcing capabilities to bring financing solutions to a wide range of businesses.

Placement agency established
Briarcliffe Credit Partners, a placement agency fully dedicated to private credit, has launched. Headquartered in New York, BCP will provide fundraising services to private credit investment firms focusing on niche strategies outside direct lending, fund sizes up to US$1.5bn and Fund II or higher. The BCP model will generally focus on 6-8 non-competing mandates at any given time and through a cost structure based on the realisation and success of the fundraise.

Ex-FIRSTAvenue Americas ceo and partner Jess Larsen will serve as ceo of BCP. He is joined by Kyle John, who will serve as md of sales and was previously director of institutional sales at Regan Capital. The pair formerly worked together at Highland Capital Management.