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Sound Point Capital Sells Minority Interest to Dyal Capital

The Neuberger Berman division, which takes stakes in alternative asset managers via private capital funds, has struck its 21st such deal.

  • Sheila Dang

Asset management firm Sound Point Capital has sold a minority non-voting stake to Dyal Capital Partners, a unit of Neuberger Berman Group that takes stakes in alternative investment firms.

The proceeds of the sale will help fund the firm’s growth, and a portion will also be invested in the Sound Point CLO Fund, which was launched in 2015 to address new risk-retention rules for collateralized loan obligations, according to Sound Point’s announcement on Tuesday. (These rules, part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, require managers of CLOs to hold 5 percent of the CLOs and went into effect in December.) Dyal Capital Partners II, one of three permanent capital funds operated by Dyal, purchased the stake. The value of the transaction is not publicly disclosed.

“This is a significant event for our firm, and having access to Dyal’s global resources and permanent capital will enable us to take Sound Point’s market-leading credit investing platform to the next level,” said Stephen Ketchum, founder and managing partner of Sound Point, in the statement.

Dyal Capital was formed in 2011 and acquires minority interests in hedge funds and other alternative asset management firms. With the Sound Point deal, the fund now has 21 minority partnerships; its roster includes deals with JANA Partners, Halcyon Capital Management, and Starwood Capital Group, among others. Its permanent capital vehicles are open-ended investments without a set time horizon.

Sound Point managed more than $11.5 billion in assets as of the end of January on behalf of institutions, pensions, and family offices, among others, according to its website. Its strategies include leveraged loans, long-short credit opportunities, and distressed credit.