(Bloomberg) -- Carlyle Group Inc. is in advanced discussions to acquire Todd Boehly's CBAM Partners investment firm as the private equity giant seeks to expand its reach across credit markets, according to people with knowledge of the matter.
A potential transaction could value CBAM, which is majority owned by Boehly's Eldridge Industries, at $750 million to $850 million, said the people, who asked not to be identified because the conversations are private. CBAM has no debt of its own.
The New York-based firm, which manages more than $15 billion primarily through collateralized loan obligations, has attracted interest from other asset managers that are looking to expand their credit offerings, including Investcorp, the people said.
Carlyle didn't respond to requests for comment. Representatives for Eldridge Industries, CBAM and Investcorp declined to comment.
Negotiations between Carlyle and Eldridge are expected to continue on an exclusive basis until mid- to late February, the people said. No deal has been finalized and talks could still fall apart.
The interest in CBAM, which was founded only six years ago, comes amid voracious appetite among asset managers for higher-yielding credit investments and the ability to originate a proprietary deal flow.
Carlyle has been working for years to expand its credit-investment business, which accounts for roughly a quarter of its $301 billion of assets under management. In a call with analysts to discuss quarterly earnings on Thursday, Chief Financial Officer Curtis Buser said the firm expects to see “a breakout year” for its global credit business in 2022.
Earlier this week, Carlyle's credit unit agreed to buy a portfolio of net-lease office, entertainment and industrial properties from IStar Inc. for $3.07 billion.
Eldridge, the conglomerate founded by Boehly after he left his role as president of Guggenheim Partners, owns around 70% of CBAM, one of the people said. The credit firm's management and employees own the rest. Eldridge is unlikely to sell its entire stake in the business, Bloomberg previously reported.
CBAM has issued more than $12 billion of CLOs since its 2016 founding by Don Young, Mike Damaso and Jay Garrett. The firm has the backing of Security Benefit, a provider of annuity and other retirement products that's also part of Eldridge and an investor in CBAM's CLOs.
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