Allied Capital is buying loan management business Callidus Capital Management in a move that will provide the firm with a senior debt capability to originate mezzanine deal flow. Allied will provide Callidus with $100 million of financing. "Allied has purchased a controlling interest, but [management] will have a significant position," stated Gary Neems , a co-founder and managing director of Callidus. As first reported on LMW 's Web site last week, the cash will fund working capital, support warehouse facilities and invest in the equity of future CLOs. Neems said Callidus is in talks about a third collateralized debt obligation, which will be a loan fund, but it has not yet started warehousing.
Neems explained that Callidus was looking to grow the business and this will provide the firm with a strong strategic partner and will also provide the firm with capital. "Allied is primarily a credit business," he said, explaining the firm offers mezzanine and private equity. "They were looking to expand into the corporate loan space," he added. Allied will have an opportunity to receive referrals for new mezzanine financings as well as refer opportunities for senior loan financings, according to a statement from Allied. Callidus has $700 million in assets under management.