Global investment management firm AllianceBernstein (NYSE: AB) will acquire global private alternatives investment manager CarVal Investors in a deal that will expand AllianceBernstein’s portfolio, particularly in private alternative investments.
Pursuant to the March 17 deal, AllianceBernstein will acquire CarVal for $750 million cash with a multi-year earn out if it reaches certain targets.
The filing notes that CarVal has approximately $14.3 billion in assets under management, “primarily focused on opportunistic and distressed credit, renewable energy infrastructure, specialty finance and transportation investments.” Furthermore, this acquisition will reportedly enhance AllianceBernstein’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.” Additionally, as stated in the filings, this will expand AllianceBernstein’s private market capabilities to encompass approximately $50 billion in assets under management on a pro forma basis.
“This acquisition reflects our firm’s continued commitment to advancing AB’s Private Alternatives business,” CEO and President of AllianceBernstein, Seth Bernstein, said in a press release. “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.”
The senior leadership of CarVal will continue with the firm and CarVal’s team will remain independent with no change to investment process or personnel and will benefit from AllianceBernstein’s resources. Upon consummation, CarVal will become a wholly owned subsidiary of AllianceBernstein L.P. and it will be rebranded as AB CarVal Investors.
“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,” CarVal Investors Managing Principal, Lucas Detor, said in a statement. “This acquisition allows CarVal to grow while retaining our investment and day-to-day independence.”
According to the filings, AllianceBernstein and Equitable are two companies of Equitable Holdings. Equitable has agreed to use $10 billion in investment capital from its general account on AllianceBernstein’s private alternatives platform, which includes $750 million to be used across targeted CarVal strategies.
The transaction is subject to customary closing conditions and is expected to close in Q2 2022.
AllianceBernstein is represented by Wachtell, Lipton, Rosen & Katz and its financial advisor is Citi. CarVal is represented by Schulte Roth & Zabel LLP and its financial advisor is Rothschild & Co.
AllianceBernstein previously acquired AnchorPath Financial in 2020.
Prior to the announcement, AllianceBernstein’s stock was valued at $44.56 on March 16. When it was announced on March 17, its stock was valued at $46.12 and a few days later, on March 21, stock closed at $46.51.
