Assured Guaranty completes $160m acquisition of BlueMountain Capital

Assured Guaranty, Bermuda-based financial guaranty insurance company, said that its subsidiary Assured Guaranty US Holdings (AGUS) has completed its previously announced $160 million acquisition of BlueMountain Capital Management and its associated entities.

BlueMountain Capital Management, which is an alternative asset management company, has $18.9 billion in assets under management (AUM). As per CreditFlux CLO manager rankings as of Q2 2019, BlueMountain Capital Management the 18th largest global collateralized loan obligations (CLO) manager in terms of assets under management. The company also manages long-duration opportunity funds and relative value hedge funds.

Assured Guaranty acquisition of BlueMountain was announced in August 2019.

Dominic Frederico – President and CEO of Assured Guaranty said: “Assured Guaranty is now not only the world’s leading financial guarantor but also, through BlueMountain, a respected alternative asset manager with a highly ranked position in the collateralized loan obligation (CLO) market. BlueMountain diversifies Assured Guaranty’s business profile by providing a fee-based revenue source to complement our risk-based premium revenues, and gives us an in-house platform to generate improved investment returns that may unlock greater dividend potential for our insurance companies.

“At the same time, Assured Guaranty is supporting BlueMountain’s growth through an infusion of working capital and an allocation of our investment portfolio to BlueMountain-managed investment vehicles.”

Assured Guaranty acquires BlueMountain Capital Management. Image courtesy of Stuart Miles at FreeDigitalPhotos.net.

Goldman Sachs & Co and Greensledge Capital Markets were the financial advisors, while Mayer Brown was the legal advisor to Assured Guaranty during the deal. For BlueMountain Capital Management, Barclays Capital was the financial advisor, while Purrington Moody Weil was the legal advisor.

In a separate development, Andrew Feldstein, co-founder of BlueMountain Capital Management agreed to acquire $22.5 million worth shares in Assured Guaranty in the next two months. Andrew Feldstein has joined Assured Guaranty as Chief Investment Officer and Head of Asset Management and will continue to be CEO and Chief Investment Officer of BlueMountain Capital Management.

Andrew Feldstein said: “By becoming a member company of the Assured Guaranty group, BlueMountain has gained greater financial stability and duration of capital, along with access to the experience and strategic outlook of the long-time leader in its credit-intensive market.

“We intend to expand Assured Guaranty’s asset management capabilities and to make the most of the synergies inherent in our companies’ mutual strengths in credit, asset-backed finance, infrastructure and healthcare.”