Mediobanca's Cairn unit merges with bad loan manager Bybrook

FILE PHOTO: A logo of Mediobanca is pictured at Mediobanca headquarters in Milan, Italy, November 12, 2019. REUTERS/Flavio Lo Scalzo/ File Photo

MILAN (Reuters) – Italy’s Mediobanca said on Tuesday its Cairn Capital unit would acquire and merge with London-based distressed credit specialist Bybrook Capital as part of its strategy to strengthen its wealth management division.

The new company aims to become a leading diversified alternative credit manager with around $8 billion in assets under management, Mediobanca said.

Mediobanca will retain a stake of around 64% in the new group, while the remaining 36% will be held by former Bybrook shareholders and Cairn Capital’s minority investors, they said.

No other financial details were provided. Citi analysts said in a note that Mediobanca had indicated the transaction would have a negative impact of around 15 basis points on its capital position.

“One more piece in the Wealth Management puzzle,” the Citi analysts said. “The capital impact of the acquisition is within the group’s annual budget for M&A and in an area considered strategic to expand its offer.”

Bybrook, founded in 2014, is focused on stressed and distressed debt and special situations in Europe and currently manages around $2.5 billion on behalf of top tier international institutional investors.

“With the acquisition of Cairn Capital in 2015, RAM Active Investments in 2017 and Bybrook today, Mediobanca keeps building an Alternative Asset Management platform which today manages roughly $10 billion in AUM,” Mediobanca CEO Alberto Nagel said in a statement.

The deal, subject to the customary conditions, is expected to close in the second quarter of 2021.

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