Toronto-based Brookfield Asset Management is in advanced talks to buy a majority stake in Castlelake, a specialist private credit investor.
The deal would see the world’s second largest alternative investment manager invest more than $1.5bn to acquire a majority stake in Castlelake, as well as making a large investment in Castlelake’s funds, according to the Financial Times.
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Castlelake, which is based in Minneapolis, has around $22bn in assets under management and focuses on real assets, specialty finance and aircraft leasing. For example, it has provided financing for large airlines, like United Airlines, secured against their planes.
If the deal goes ahead, it will form part of a broader trend of increased consolidation in the credit sector as some of the largest asset managers look to diversify their offerings by acquiring smaller credit firms.
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Castlelake would sit in Brookfield’s recently formed credit unit, which also has a controlling interest in Oaktree Capital Management, co-founded by well-known investors Howard Marks and Bruce Karsh.
Brookfield and Castelake were both contacted for comment. Brookfield declined to comment.
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