AllianceBernstein to Acquire CarVal Investors03.18.2022
AllianceBernstein L.P. (“AB”) and AllianceBernstein Holding L.P. (“AB Holding”), a leading research and global investment firm, announced it will acquire CarVal Investors L.P. (“CarVal”).
CarVal is a leading global private alternatives investment manager with approximately $14.3 billion in assets under management (“AUM”)(1), primarily focused on opportunistic and distressed credit, renewable energy infrastructure, specialty finance and transportation investments.
Today AB announced it will acquire leading global private alternatives investment manager CarVal Investors, representing an important step forward in our continued goal of better serving clients by growing our world-class Private Alternatives business: https://t.co/TOZdib7heh
— AllianceBernstein (AB) (@AB_insights) March 17, 2022
The acquisition represents an important step forward in AB’s continued goal of better serving its clients by building and growing its world-class Private Alternatives business. The addition of CarVal, with 190 employees, including 68 investment professionals, in five offices across four countries, enhances AB’s Private Alternatives platform by adding complementary investment capabilities in opportunistic and private credit and expanding across multiple geographic regions, including North America, Europe, Latin America, and Asia.
As clients increasingly look to private market strategies for return and yield enhancement, as well as diversification, CarVal brings complementary private markets capabilities to AB’s Private Alternatives business and augments the firm’s position as a market leader. The addition of CarVal now expands AB’s private markets capabilities to encompass almost $50 billion in AUM(1) on a pro forma basis.
CarVal’s senior leadership team will continue to lead the firm. CarVal’s teams will remain independent, continuing to operate from its Minneapolis, Minnesota, headquarters and offices around the world, with no change to the current investment process or personnel, and will benefit from AB’s broader resources, including global distribution and product development.
“This acquisition reflects our firm’s continued commitment to advancing AB’s Private Alternatives business,” said CEO and President of AB Seth Bernstein. “CarVal’s global presence and broad capability set creates new and exciting growth opportunities for AB – diversifying and expanding our services to meet our clients’ evolving needs.”
“We are pleased to join forces with CarVal to broaden our global Private Alternatives platform,” said AB’s Head of Private Alternatives Matt Bass. “CarVal’s extensive market experience, combined with its strong leadership team and collaborative, entrepreneurial culture, is a natural and strong fit with AB’s strategic priorities. Working closely with the CarVal team, we look forward to all that we will accomplish together.”
“AB’s leadership, track record, values and platform make it an excellent business partner for CarVal and our investors long term, aligning in culture, execution and excellence,” said CarVal Investors Managing Principal Lucas Detor. “This acquisition allows CarVal to grow while retaining our investment and day-to-day independence.”
This agreement is an example of the unique synergies between AllianceBernstein and Equitable, the two complementary and well-established companies of Equitable Holdings. Equitable has committed to deploy $10 billion in investment capital from its General Account towards AB’s Private Alternatives platform. Of the commitment, $750 million will be allocated across targeted CarVal strategies, further improving Equitable’s risk-adjusted return and strengthening AB’s efforts to grow higher multiple, higher margin and capital light businesses.
AB has announced a definitive agreement to purchase 100% of CarVal for an upfront purchase price of $750 million, and a multi-year earnout if certain targets are reached. At the transaction closing, expected to occur in the second quarter of 2022, CarVal will become a wholly owned subsidiary of AllianceBernstein L.P. and will be rebranded as AB CarVal Investors. The transaction is subject to customary regulatory and closing conditions.
Citi served as financial advisor and Wachtell, Lipton, Rosen & Katz served as legal counsel to AB. Rothschild & Co served as financial advisor and Schulte Roth & Zabel LLP served as legal counsel to CarVal.