Sector developments and company hires

Garrison CLO platform acquired
Mount Logan Capital subsidiary Mount Logan Management (ML Management) has acquired from Garrison Investment Management (GIM) and other sellers the rights under certain interests and agreements relating to Garrison Funding 2018-1 and Garrison MML CLO 2019-1, as well as the rights under certain side letter agreements, for a purchase price of US$3m. As of 30 June 2020, the 2018 and 2019 CLOs had approximately US$330m and US$332m of assets under management respectively.

At the same time, ML Management has been registered as an investment adviser with the US SEC to manage Garrison’s CLO platform, for which it is entitled to receive an annual management fee of 0.50%-0.60% of aggregate gross assets, subject to reductions based on caps, transaction fees and fee-sharing arrangements. The firm says the move is a step towards accelerating its transition to an “asset-light” business model.

In other news…

European CLOs migrating
Atlantic Star Consulting data shows that 58 CLOs originally incorporated as Dutch SPVs have now set up Irish DACs. These transactions are managed by nine collateral managers, the largest of which - by number of migrations - are PGIM and Alcentra. This follows a change in interpretation of VAT law in connection with CLO management fees by the Dutch tax authorities (SCI 24 February).