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AAMAC buys Halcyon Asset Management and takes it public

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Privately-owned Halcyon Asset Management and Alternative Asset Management Acquisition Corporation have announced that Halcyon will become accessible via a listing on the New York Stock Exc

Privately-owned Halcyon Asset Management and Alternative Asset Management Acquisition Corporation have announced that Halcyon will become accessible via a listing on the New York Stock Exchange, as a result of an acquisition by AAMAC.

Halcyon, founded in 1981, is a global alternative asset management firm with approximately USD11.5bn in assets under management. The new entity will be called Halcyon Management.

The transaction values Halcyon at approximately USD974m. Under the terms of the agreement, members of Halcyon will receive up to USD50m in cash and notes, and will retain interests in Halcyon exchangeable into shares of AAMAC, one-for-one.  AAMAC invests in alternative businesses.

The terms also provide for the ownership of the Halcyon exchangeable interests to be adjusted upward contingent upon achieving certain stock price targets. Halcyon members will initially own about 43.6 per cent of the fully diluted ownership interest of the new entity.

Partners of Halcyon entities will further align their interests with fund investors, reinvesting 75 per cent of the after-tax cash proceeds in Halcyon funds, typically for three years, at full fees to the public stockholders. Halcyon’s partners will enter into lock-up and non-compete agreements, and their equity consideration will generally vest over five years.

Halcyon has a diverse investor base including leading public and private pension funds, endowments, foundations, financial institutions, insurance companies, funds of hedge funds and high net worth individuals.

It has clients in the United States, Canada, Latin America, the United Kingdom, Continental Europe, the Middle East, Asia ex-Japan, Japan and Australia. Halcyon manages multi-strategy funds, as well as additional strategies focused on off-the-run and difficult-to-source investments, stressed/distressed and undervalued asset-backed securities, senior secured bank loans and long/short corporate debt investments.

‘We believe this transaction, first and foremost, will benefit our investors. It will enhance our ability to attract and retain the best talent in the business, ensuring our continued ability to build on our track record by having the right people for the right strategies at the right time,’ says John Bader, co chairman of Halcyon Asset Management. ‘It will give us a currency for further growth, which will help us motivate employees and support our recruiting efforts. Our reinvestment of the proceeds will further strengthen our alignment of interests with fund investors.’

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