Babson Capital Management, the MassMutual group investment management firm based in Springfield and Boston, Massachusetts, has acquired Murray Capital Management, a distressed debt manager, on undisclosed terms.

New York-based Murray Capital specialises in distressed debt, transitional and stressed high yield, special situation equities and private claims investment. Founded in 1995 by Marti Murray, its current president, portfolio manager and senior research analyst, the firm is one of the five underlying managers of the Dow Jones hedge fund strategy benchmarks for distressed securities.

Murray and her investment team will join Babson Capital and follow the same investment process and philosophy. She will report to Cliff Noreen, head of Babson's corporate securities division and vice-chairman of the firm.

'Marti and her team bring a wealth of distressed debt investing experience to Babson Capital, have a proven track record of success, and share our dedication to thorough research, a disciplined investment process and transparency,' Noreen says.

'This acquisition is consistent with our philosophy of selectively adding capabilities that complement and extend the investment strategies we offer our clients. It is also well timed given the unprecedented market dislocation that is creating distressed debt investment opportunities.'

Says Murray: 'Joining Babson Capital provides us with the resources of a larger firm, in an environment that will allow our team to continue the successful investment process we have followed for many years. Babson has a history of acquiring skilled managers and leveraging that expertise to the benefit of all.'

The acquisition is Babson's third in six years, following the acquisition of its Charlotte-based US bank loan team from Wachovia in 2002 and its London-based European bank loan business, Babson Capital Europe, from Duke Street Capital in 2004.

Murray Capital's activities consist primarily of investing in securities issued by companies undergoing financial difficulties because of underlying operational or balance sheet issues or litigation, such as product liability disputes.

The firm also invests either long or short in newly-issued debt and equity of companies emerging from a bankruptcy or reorganisation. It seeks to maximise total return in a risk- controlled fashion by identifying securities that are undervalued or potentially overvalued due to market inefficiencies.

Marti Murray has 21 years of experience investing in distressed debt securities. Before founding Murray Capital, she spent five years at Furman Selz as a senior managing director and portfolio manager for two proprietary and other discretionary accounts.

Between 1987 and 1990, she was a senior vice-president Oppenheimer & Co and investment analyst for the Horizon Fund and other accounts that invested in the debt and equity of troubled companies. Earlier she was an associate at First New York Capital, an investment bank providing merger and acquisition, private placement and venture capital services to middle market companies.

Babson Capital Management, a member of the MassMutual Financial Group, and its subsidiaries managed more than USD108bn at the end of March for sophisticated US and international investors in a range of absolute return, co-investing, financing and customised mandates using equity, fixed income and derivative instruments. The firm has other offices in the US and subsidiaries in London and Tokyo.


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