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First Eagle builds out credit platform with another experienced manager, THL Credit

Posted on December 10, 2019

First Eagle Investment Management announced this morning it plans to acquire THL Credit Advisors, an experienced $17 billion credit manager of both large and mid-sized borrowers.

The deal broadens First Eagle’s platform by adding syndicated capabilities and expands the direct lending business.

First Eagle, primarily a mutual fund manager, entered the credit asset class in 2017 with the purchase of middle-market lender NewStar Financial, which at that time had $7.3 billion in assets.

The deal with THL will boost First Eagle’s credit platform to $23 billion, spread across BDCs, CLOs, separately managed accounts and commingled funds.

The acquisition comes during a time of better-educated LPs who are giving allocations to more experienced managers that have the scale and capability to pivot with the market as the credit cycle heads into its 10th year. THL Credit and NewStar both survived the ’08 credit crisis and successfully navigated the tough years that followed.

THL’s CEO Chris Flynn will lead the combined credit platform, reporting to First Eagle’s Mehdi Mahmud, CEO of First Eagle.

THL Credit was established in 2007 as the credit affiliate of PE firm Thomas H. Lee Partners. The company’s headquarters are in Boston, but THL Credit’s primary underwriting operations are in Chicago.

Closing is expected in the first quarter of 2020, pending regulatory approvals and other customary closing conditions.

First Eagle is backed by Blackstone Capital and Corsair Capital, which invested $4 billion in 2015 to acquire the investment manager from TA Associates.

As of Sept. 30, First Eagle had nearly $100 billion in total assets under management.—Kelly Thompson

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Direct Lending Deals is a new publication that lifts the curtain on private credit by giving investors and originators the latest news and analysis on terms & trends in the direct lending market. DLD focuses on sponsored transactions, the main driver of deal flow. We tap into 20-year relationships to go deeper in market, and cover all segments of direct lending including structures, fundraising, BDCs and people shaping the market.

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