Hedge fund firm LibreMax Capital agreed to buy Trimaran Advisors, which manages about $3 billion of collateralized loan obligations, according to a statement from LibreMax.
LibreMax founder Greg Lippmann, whose exploits were chronicled in Michael Lewis's 2010 book "The Big Short" and a 2015 film of the same title, previously has said corporate debt and equities will face the biggest pain when the next downturn comes. Firms have loaded up on debt amid ultralow interest rates during the past decade, while consumers have borrowed comparatively less, he said at a conference in May.
Money managers have been snatching up near-record amounts of CLOs this year, because the securities typically pay floating rates and offer relatively high yields. CLOs package loans to subinvestment-grade companies into bonds rated as high as AAA.
Trimaran Advisors is a New York-based asset manager that oversees six CLOs, according to the statement. Dominick Mazzitelli, Trimaran's chief investment officer and head of its CLO platform, will continue to lead the business after the deal's close, which expected by yearend.