USA – Cargil has agreed to sell its ownership and economic interest in CarVal Investors to a partnership comprised of the firm’s senior management team.
CarVal Investors is an alternative investment fund manager and independently managed subsidiary of Cargill.
The transaction is expected to close in the fourth quarter of calendar 2019, pending consents to the change in control from investors in CarVal’s funds.
Following the completion of the management buyout, Cargill will remain invested in CarVal’s funds. Terms of the sale were not disclosed.
“Cargill is pleased to sell our interest in CarVal to the senior team that has successfully managed the firm for the past three years,” said Jay Olson, corporate vice president and treasurer of Cargill and chair of the CarVal Board of Directors.
“We reached this decision through a collaborative process and are confident that CarVal will thrive as an employee-owned business.”
Founded in 1987 by Cargill, CarVal is an alternative investment fund manager that became an independently managed subsidiary of Cargill in 2006.
CarVal has US$10 billion in assets under management in corporate securities, loan portfolios, structured credit and hard assets
In 2016, the CarVal Board of Directors appointed Lucas Detor, James Ganley and Jody Gunderson as the as executive team of the firm. The team has been managing principals of CarVal since then.
The three are responsible for strategic direction, investments and operations globally. As part of the purchasing partnership, they will continue to hold these duties going forward.
However, Olson will step down as chairman of CarVal once the transaction closes in October.
“We appreciate the trust, confidence and support that Cargill has given to the CarVal team over many years,” said Lucas Detor, managing principal, CarVal Investors.
“We expect a smooth transition and remain focused on serving our investors with excellence, integrity and strong performance.”
Cargill, which had been receiving approximately 20% of CarVal’s revenues from investment fees, will no longer receive revenues following the sale.
Instead, the new employee-owned partnership will receive all revenues, CarVal said. J.P. Morgan acted as exclusive financial advisor to Cargill on this transaction.