Cowen Group is to acquire CRT Capital Group’s credit products, credit research, special situations and emerging markets units. The acquired business will be named Cowen Credit Research and Trading and will focus on distressed debt, special situations and emerging markets.
CRT will use the proceeds from the transaction to invest further in its Equities, Banking and Rates businesses.
CRT’s Credit Products unit encompasses the sales and trading of distressed convertibles, high yield securities, distressed debt, private placements and trade claims. The Credit Research unit is focused on distressed and special situations coverage and cross-capital structure. The Special Situations group includes the sales and trading of event driven, post-reorganisation equities, spins and other special situations. The Emerging Markets unit includes the sales and trading of emerging market credit, non-US corporate debt and local currency debt.
“CRT, formerly Credit Research and Trading, has a long and illustrious reputation for building a market leading agency franchise in distressed debt and special situations over the last 20 years in a way that is not capital intensive,” says Peter A Cohen, Chairman and Chief Executive Officer of Cowen. “Delivering value added capabilities to clients who seek to outperform is at the core of what we do. The businesses that we are acquiring from CRT have a longstanding reputation for doing the same thing by providing clients with idea-driven advice, differentiated research and outstanding execution.”
Jeffrey M Solomon, President of Cowen, says: “We believe this is an opportune time to scale our existing capabilities into fixed income sales and trading given current market conditions. Cowen already has a solid footprint in debt capital markets and investment banking, and the addition of a fixed income agency distribution platform will enable us to provide real value for clients in the crossover, high yield and private debt finance markets. Moreover, the addition of CRT’s special situations group dovetails extremely well with our existing equities franchise and enables us to provide expanded product capabilities to clients in research, sales and trading.”
“This transaction is beneficial to both firms,” says Ted Janulis, CRT’s Chief Executive Officer. “CRT will move forward with a focus on growing its Equities, Banking and Rates businesses while our Credit, Emerging Markets and Special Situations businesses will be a valuable addition to Cowen.”
With this transaction, CRT solidifies its strategic focus on its Equities, Investment Banking, and Rates businesses. In April 2015, CRT completed the acquisition of the institutional equities business of Sterne Agee, more than doubling the size of CRT’s equities business. “We are excited about the future of our Equities and Investment Banking franchise,” says Bill Jump, CRT’s President and Head of Equities. “Over the past year we have hired a combined sixteen widely respected research analysts and senior bankers in our efforts to expand upon our core strength – providing differentiated value to institutional and corporate clients. Our market share growth has continued into 2016 and we expect to build off this success as we continue to invest in these businesses.”
