AllianceBernstein signed a definitive agreement to acquire private alternatives investment manager CarVal Investors L.P., which had about $14.3 billion in assets under management as of Dec. 31, 2021.
CarVal is primarily focused on "opportunistic and distressed credit, renewable energy infrastructure, specialty finance and transportation investments," AllianceBernstein said in a news release Thursday.
Under terms of the agreement, AllianceBernstein will acquire 100% of CarVal for an upfront purchase price of $750 million and a multiyear earnout "if certain targets are reached," according to the release.
At closing, which is expected in the second quarter subject to customary conditions, CarVal will become a wholly owned subsidiary of AllianceBernstein and will be rebranded as AB CarVal Investors.
The addition of CarVal will increase AB's private markets AUM to nearly $50 billion, the firm noted in the release. The deal will also add CarVal's 190 employees, including 68 investment professionals, in five offices across four countries; an AllianceBernstein spokeswoman said that CarVal has operations in U.S., U.K., Singapore and Luxembourg.
CarVal's senior leadership team will continue to lead the firm and will remain independent, the release noted. The acquisition will cause no change to CarVal's current investment process or personnel, AB added in the release.
In addition, AllianceBernstein's parent corporation, Equitable Holdings, will allocate $750 million of general account assets into CarVal strategies to "improve risk-adjusted returns to policyholders." CarVal will also gain access to AB's global distribution platform.
"This acquisition reflects our firm's continued commitment to advancing AB's private alternatives business," said Seth Bernstein, president and CEO of AB, in the release.
CarVal's Managing Principal Lucas Detor added in the release, "This acquisition allows CarVal to grow while retaining our investment and day-to-day independence."
As of Feb. 28, AllianceBernstein had $739 billion in AUM, the release added.