Guggenheim Investments, known for managing insurance company assets, is luring a more diverse group of institutional clients with its solid investment performance while it raises capital to expand even further.
Guggenheim specializes in fixed income, but also manages some equities and alternatives. It attracted its first non-insurance client in 2007. Corporate and public pension plans, along with foundations and endowments, made up 30% of the firm's $148.3 billion in assets under management as of June 30, company officials say.
Its growth has been rapid; assets rose more than 75% in the last 5½ years.
The firm opened 14 years ago, part of a deal that merged the business of specialty financial company Liberty Hampshire Co. with the family office of the fabled Guggenheim family and Links Securities, a broker-dealer. Mark Walter, Liberty Hampshire's CEO and co-founder, is CEO of Guggenheim Partners, Guggenheim Investments' parent.
Neither Guggenheim Investments — based in Santa Monica, Calif., and New York — nor its parent discloses financial information. Still, the money manager has been successful enough to help Guggenheim Partners lead groups of investors buying controlling stakes in various life insurance companies, as well as to expand into investment banking in 2009.
The strength and stability of the investment management business is an important component of the value that has been created at Guggenheim Partners, President Todd Boehly said in a statement. “This value has helped support the overall growth of Guggenheim Partners, in both asset management and Guggenheim's other businesses.”
(A consortium led by Mr. Walter and that includes Mr. Boehly formed Guggenheim Baseball Management and purchased the Los Angeles Dodgers last year.)
Guggenheim Investments, meanwhile, got a capital injection July 22, receiving $700 million in new low-cost financing in the form of a seven-year term loan from a consortium of five banks. It will be used to refinance higher-cost debt and expand opportunistically, Mr. Boehly, who is based in New York, said in an interview. He wouldn't say how much debt the firm has.
Borrowing terms were LIBOR plus 325 basis points, with a LIBOR floor set at 100 basis points. Mr. Boehly said the loan was Guggenheim Investments' first foray into the capital markets.
He said the money will be used to refinance debt and expand, opportunistically. He wouldn't be specific. One possible use: acquiring another money management firm or other investment teams.