Assured Guaranty acquires BlueMountain Capital; Feldstein joins board

Assured Guaranty US Holdings, a subsidiary of financial guaranty insurance company Assured Guaranty, has completed the acquisition of alternative asset management firm BlueMountain Capital Management.

BlueMountain is an alternative asset management firm with $18.9 billion in assets under management. Assured Guaranty US said the deal offers it substantial diversification.

Andrew Feldstein, a co-founder of BlueMountain, has joined Assured Guaranty as chief investment officer and head of asset management and will remain chief executive officer and chief investment officer of BlueMountain.

Assured Guaranty US will purchase of all of the outstanding equity interests in BlueMountain and its associated entities for a purchase price of approximately $160 million - substantially the same terms disclosed on August 7, 2019.

Of the approximately $160 million purchase price, $3 million is being withheld and will be paid if a particular consent is received within the two months following the closing.

“This transformative transaction combines two culturally compatible companies that have complementary strengths,” said Assured Guaranty President and CEO Dominic Frederico. “We expect it to significantly benefit Assured Guaranty’s shareholders and policyholders by furthering our goal of leveraging our capital through business diversification while continuing our share repurchase programme and supporting growth at BlueMountain.

“Assured Guaranty is now not only the world’s leading financial guarantor but also, through BlueMountain, a respected alternative asset manager with a highly ranked position in the collateralized loan obligation (CLO) market. BlueMountain diversifies Assured Guaranty’s business profile by providing a fee-based revenue source to complement our risk-based premium revenues, and gives us an in-house platform to generate improved investment returns that may unlock greater dividend potential for our insurance companies. At the same time, Assured Guaranty is supporting BlueMountain’s growth through an infusion of working capital and an allocation of our investment portfolio to BlueMountain-managed investment vehicles.”

Feldstein said: “By becoming a member company of the Assured Guaranty group, BlueMountain has gained greater financial stability and duration of capital, along with access to the experience and strategic outlook of the long-time leader in its credit-intensive market. We intend to expand Assured Guaranty’s asset management capabilities and to make the most of the synergies inherent in our companies’ mutual strengths in credit, asset-backed finance, infrastructure and healthcare.”

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