Carlyle Group is poised to buy TCW Group Inc. this week, and industry veterans predict a restructuring will follow.
Sources say TCW's board of directors will meet Monday to approve the cash and stock deal. TCW spokesman Peter Viles declined comment.
TCW is likely to be valued at roughly $700 million, with Carlyle-sponsored private equity funds expected to purchase the roughly 65% stake held by French banking giant Societe General SA and the 16% stake held by SocGen affiliate Amundi.
It would be the biggest private equity deal for a U.S. money management firm since the onset of the global financial crisis.
Sources say Carlyle, based in Washington, will back a management team dominated by executives from Metropolitan West Asset Management LLC. They joined TCW at the end of 2009 when TCW announced it would acquire MetWest to replace ousted Chief Investment Officer Jeffrey E. Gundlach
Representatives for Carlyle and Societe Generale declined to comment.
With a private equity owner in control, a restructuring that could include head-count reductions and compensation cuts in exchange for equity distributions could be imminent, some sources said.
If so, MetWest CEO David Lippman, TCW's head of fixed income and a group managing director, is likely to wield the layoff ax. Under the deal, he will replace Marc I. Stern as TCW CEO, sources said.