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Mitsubishi takes minority stake in Aladdin Capital and injects seed capital

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Mitsubishi Corporation has invested USD39m to acquire a 19.5 per cent stake in Aladdin Capital Holdings, an alternative investment manager specialising in fixed income hedge funds and coll

Mitsubishi Corporation has invested USD39m to acquire a 19.5 per cent stake in Aladdin Capital Holdings, an alternative investment manager specialising in fixed income hedge funds and collateralised debt obligations.

The stake was acquired from existing shareholders in a deal for which Jefferies Putnam Lovell was the exclusive financial advisor to Aladdin. Mitsubishi, which becomes the firm’s second-largest shareholder, will also commit USD300m in seed capital for investment products managed by Aladdin.

Aladdin Capital, which had USD17.5billion in assets under management at the end of March, is headquartered in Stamford, Connecticut with offices in London and Tokyo. It invests in high-grade and high-yield bonds, leverage bank loans, asset-backed securities, credit default swaps and structured credit investments

According to Aladdin, Mitsubishi’s investment reflects a growing trend toward the acquisition of controlling or minority stakes in alternative investment firms in order to capitalise on the expected outperformance of absolute return-oriented managers and innovative products in volatile markets.

The two companies already enjoy close ties, with Mitsubishi having invested in a number of Aladdin’s investment vehicles. ‘We have always had the greatest respect for Mitsubishi,’ says the asset manager’s president and chief executive Amin Aladin.

‘We view this commitment as a powerful vote of confidence in Aladdin’s ability to manage investments in a challenging market environment and look forward to a long and mutually beneficial relationship.’

Mitsubishi believes that this is an excellent time to make such an investment considering the current state of the global financial markets. ‘We have known Aladdin for many years,’ says executive vice-president Hideshi Takeuchi.

‘They are a pre-eminent bank loan manager and one of the top-performing credit managers in the market. Our partnership with Aladdin will provide us with an ideal platform to capitalise on the numerous opportunities created by recent dislocations in the market.’

Established in 1999, Aladdin focuses on non-traditional fixed income-based strategies, with a dominant position in the CDO sector. With 86 investment and support professionals, its product suite comprises credit-focused hedge funds, 22 collateralised debt obligations and separate accounts.

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