Manulife to buy Lord Hintze’s credit investor CQS
Canada’s Manulife Investment Management is buying CQS, the UK-based alternative credit investor founded by Lord Michael Hintze, to boost its offering in the private credit space.
Manulife is acquiring the CQS brand and platform, which has $13.5bn (£10.9bn) in assets under management, for an undisclosed amount.
The investment manager said it intends to align the CQS brand with the Manulife brand as a co-branded logo where permitted.
CQS will continue to be led by chief executive Soraya Chabarek.
Read more: Investment giants deepen their influence in the private debt space
“We are pleased to enter into this agreement which we see as mutually beneficial to both firms as well for those who have been investing with CQS for decades,” said Paul Lorentz, president and chief executive of Manulife.
“CQS brings to our portfolio a proven investment process, robust performance, and expertise across market cycles, and a culture that has attracted both talent and flows into the firm. We are very excited for the opportunity as CQS’s capabilities are a complement to our existing fixed income and multi-asset solutions business and a powerful addition to our global credit offering.”
The deal will give the North American investment manager more exposure to institutional investors in Europe and the fast-growing private credit sector, which is predicted to grow to $2.7trn by 2027.
Read more: Lack of knowledge holding back investors from private assets
The sale marks the end of an era for Hintze, a prominent Conservative party donor, who is stepping back from the firm he founded in 1999.
However, Manulife said that Hintze’s flagship hedge fund, the Directional Opportunities Fund, is not included in the transaction.
Hintze will be forming his own firm under which he will continue to manage his fund on behalf of investors.
“I’m delighted that CQS has found the right partner in Manulife Investment Management,” said Hintze. “It provides a long-term platform that will enable CQS to thrive as a leading alternative credit manager for years to come under Soraya’s exceptionally able leadership. I will now focus full-time on running the Directional Opportunities Fund, an opportunity that I am excited about. I wish Soraya and the CQS team every success as they embark on this exciting new chapter.”
Read more: Private equity firms tap into debt market
The acquisition is expected to close in early 2024, subject to regulatory approval.
Piper Sandler & Company served as exclusive financial adviser and Simmons & Simmons served as legal counsel to CQS on the deal.
CQS is one of the most established names in alternative credit, having evolved into a multi-sector credit platform. It offers strategies including corporate credit, asset-backed securities, regulatory capital, convertible bonds and structured credit.