Insurer Assured Guaranty, Debt Fund Manager Sound Point to Merge, Creating $47B Credit Behemoth

Sound Point Capital Management, a credit focused investment manager, and insurer Assured Guaranty have agreed to merge, creating a $47 billion credit fund giant, as firms take advantage of the more attractive yields provided in the private credit markets than in the equity markets.

Assured Guaranty will merge its Assured Investment Management and related asset management entities, or AssuredIM, with New York-based Sound Point.

Sound Point would take over about $15 billion of investments controlled by Assured’s investment arm, including approximately $14.5 billion of collateralized loan obligations (CLOs), according to the firms. Assured, which committed to invest $1 billion in funds operated by Sound Point, who will be its sole alternative credit manager, would receive a 30% stake in the combined business.

Sound Point will manage 32 CLOs currently handled by Assured IM, including 25 US CLOs and seven European CLOs, making Sound Point the fifth largest manager of CLOs in the world, the companies said.

Assured’s investment business now mostly manages CLOs while Sound Point manages $21 billion of CLOs and about $11 billion of other debt investment products, including direct loans, capital solutions, distressed, structured products, commercial real estate lending, and specialty finance.