West Gate Advisors, a subsidiary of Metropolitan West Asset Management (MWAM), has bought ING Capital Advisors, concluding an auction that began last December. Richard Hollander, chairman and ceo of holding company Metropolitan West Financial, said prior to the acquisition MWAM managed high-yield and fixed-income assets, but had no dedicated leveraged loan group. The acquisition of the ING team broadens the range offered to clients across the capital structure to include distressed, high yield and bank loans.
As first reported last week on LMW's Web site, the ING management team, consisting of Mike Hatley, Mike Campbell and Graydon Wilcox, will stay on as principals of the newly formed entity called West Gate Horizons. They will also receive partial ownership. "They've made a commitment and will be with us," said Hollander. In addition to launching collateralized loan obligations, the firm will manage separate accounts and a commingled fund.
ING's loan business, which has $2.1 billion in assets under management, was no longer considered a core business within the insurance, banking and wealth management strategy of ING Wholesale (LMW, 12/23). ING Capital Management, the European arm, was sold to Highland Capital Management earlier this year, but according to multiple sources the U.S. business was a more complicated sell.
One potential buyer said a big issue was that several CLOs that ING managed were nearing the end of their reinvestment periods. Indeed, one CLO was reportedly liquidated in a $350 million auction in May (LMW, 5/6). There were suggestions ING had miscalculated by not investing in the business while trying to sell it.
Hollander declined to comment on whether ING had neglected the business, the auction process and the price paid for the business. He said Metropolitan West looks to back good managers and then assists them with infrastructure, such as compliance and marketing, enabling the management to focus on managing the assets. "We get behind great credit people that know their trade," he added. When Metropolitan West made its initial investment in MW Post Advisory Group, the firm had $400 million in assets. "It now has $8 billion," Hollander said. An ING spokeswoman declined to comment on the price or the other bidders.
