Sector developments and company hires

AssuredIM, Sound Point create CLO powerhouse
Assured Guaranty has announced an agreement with Sound Point Capital Management, pursuant to which Assured Guaranty will contribute its entire equity interest in Assured Investment Management and - with certain exceptions - its related asset management entities to Sound Point. In addition, US insurers Assured Guaranty Municipal Corp and Assured Guaranty Corp will engage Sound Point as their sole alternative credit manager to invest US$1bn over time in alternative credit strategies, including nearly US$400m currently managed by AssuredIM, as of 31 December 2022. In exchange, Assured Guaranty will receive a 30% ownership interest in the combined business, subject to potential post-closing adjustments.

Assured Guaranty acquired AssuredIM (formerly BlueMountain Capital Management) in October 2019 (SCI 9 August 2019). AssuredIM will transfer assets under management of approximately US$15.2 billion, including approximately US$14.5bn of CLOs, to Sound Point upon completion of the transaction. As a result, Sound Point - which had approximately US$21.4bn in CLOs and US$32bn in total AUM, as of 31 December 2022 - is expected to become the fifth largest CLO manager by AUM in the world.

Assured says the combination advances two of the objectives the firm set out when it entered the asset management business. The first objective was to establish a fee-based earnings stream independent of the risk-based premiums generated by its financial guaranty business. The second objective was to enhance the alternative investment opportunities for its financial guaranty subsidiaries’ investment portfolios.

Assured expects the transaction to be immediately accretive to earnings per share, return on equity and book value per share, as well as the company's adjusted operating shareholders’ equity per share and adjusted book value per share. It also plans to continue its current capital management programme, including share repurchases.

The transaction is expected to be completed in 3Q23, subject to certain customary closing conditions. Following closing, Assured president and ceo Dominic Frederico will be appointed to the Sound Point board of managers.

In other news…

MBS ETF pair debuts
DoubleLine Capital has launched a pair of actively managed MBS ETFs - the DoubleLine Mortgage ETF (DMBS) and the DoubleLine Commercial Real Estate ETF (DCMB).

The objective of DMBS is to seek total return that exceeds the total return of its benchmark, the Bloomberg US Mortgage-Backed Securities Index, over a full market cycle. The Mortgage ETF invests primarily in high-quality investment grade RMBS, allocating between agency and non-agency MBS.

Portfolio managers of the Mortgage ETF are Jeffrey Gundlach, founder, ceo and cio of DoubleLine; Vitaliy Liberman, portfolio manager overseeing DoubleLine’s agency MBS team; and Ken Shinoda, chairman of the firm’s structured products committee and portfolio manager overseeing the non-agency RMBS team.

The objective of DCMB is to seek current income and capital preservation, with long-term capital appreciation as a secondary objective. The fund invests in senior investment grade CMBS and employs active management through security selection across CRE property types and subsectors, while maintaining a low level of interest rate risk. The investment universe includes high-quality CRE debt across agency CMBS, non-agency CMBS and CRE CLOs.

Portfolio managers of the Commercial Real Estate ETF are Morris Chen, who heads DoubleLine’s CMBS and CRE debt team; Mark Cho, portfolio manager responsible for the team’s CMBS credit platform; and Robert Stanbrook, portfolio manager responsible for the team’s CRE loan platform, as well as its investments in CRE CLOs.

North America
Marathon Asset Management has appointed Jennifer Wildeman and Thorne Gregory as mds, dedicated to providing client services and solutions. Wildeman has over 16 years of experience serving as a private markets specialist and advisor to institutions. Prior to Marathon Asset Management, she was an md at ACORE Capital, responsible for investor relations as well as product and business development.

Gregory has over 30 years of experience in investment banking, corporate finance and institutional client management. He rejoins Marathon Asset Management, where he worked from 2010 to 2017, and has experience from JPMorgan in the financial institutions group and in a broad range of private markets strategies at Fortress Investment Group, Alcentra and Partners Group.

Signature, SVB portfolio dispositions underway
The FDIC, as receiver of the former Signature Bank and Silicon Valley Bank, has retained BlackRock Financial Market Advisory to undertake a marketing process to sell the securities portfolios retained from the two receiverships. The face values of the two portfolios are approximately US$27bn and US$87bn respectively, primarily comprising agency MBS, CMOs and CMBS. The portfolio sales, which will be gradual and orderly, will aim to minimise the potential for any adverse impact on market functioning by taking into account daily liquidity and trading conditions.

The FDIC has also announced the framework of a marketing process for the approximately US$60bn CRE loan portfolio retained in the Signature Bank receivership, which includes a concentration of multifamily properties, primarily located in New York City. The Corporation notes that it has a statutory obligation to maximise the preservation of the availability and affordability of residential real estate property for low- and moderate-income individuals. As such, it is currently reviewing the CRE loans secured by multifamily residences that are rent stabilised or rent controlled and plans to reach out to state and local government agencies, as well as community-based organisations, to seek their input as the FDIC develops its marketing and disposition strategy.

The FDIC has retained Newmark & Company Real Estate as an advisor on this sale, with marketing of the portfolio expected to begin later this summer.