Market updates and sector developments

Rithm Capital is set to acquire Sculptor Capital Management in a transaction valued at approximately US$639m, which includes US$11.15 per Class A share of Sculptor. This transaction will leverage Sculptor’s US$34bn of AUM with Rithm’s US$7bn of permanent equity capital and US$30bn-plus balance sheet to create what the firm describes as a “world-class” asset management business.

Sculptor’s investment and leadership teams will continue in their roles and certain members of Sculptor leadership have agreed to vote shares held by them, representing an aggregate of approximately 26% of the outstanding Sculptor voting shares, in favour of the transaction. Upon completion of the transaction, Sculptor will operate as a subsidiary of Rithm and will continue to be led by Jimmy Levin, as cio and executive managing partner, reporting to Michael Nierenberg, ceo, president and chair of Rithm.

In other news…

PGIM CLO ETF debuts
PGIM has launched the PGIM AAA CLO ETF (PAAA), offering retail investors direct access to the US$1.2trn CLO market, historically accessible only to institutional investors. PAAA is sub-advised by PGIM Fixed Income, which has US$101bn in securitised credit assets under management, including US$55bn in CLO tranches.

While the ETF represents a new retail offering for the firm, PGIM Fixed Income has been managing sleeves of high-grade CLOs within its investment strategies for more than 15 years, with a team of 27 investment professionals dedicated to the securitised credit space. The ETF is managed by PGIM securitised products co-heads Edwin Wilches and Gabriel Rivera, alongside CLO portfolio manager Connor Byrnes.

With a net expense ratio of 0.19%, PAAA seeks to maximise total return through a combination of current income and capital appreciation, investing primarily in US CLOs rated triple-A or equivalent.