(Bloomberg) - Investment bank Lazard Ltd. is in advanced talks to acquire hedge fund firm Brigade Capital Management, according to people with knowledge of the matter.
The $30 billion credit-investment firm, run by Don Morgan, is close to inking a deal with New York-based Lazard that will add to its asset-management business, the people said, asking not to be identified discussing private information. A spokesman for Brigade declined to comment, and a representative for Lazard didn’t immediately respond to requests for comment.
Large financial firms are increasingly looking for ways to expand in alternative investments, where the promise of higher returns and an expanding market has attracted a frenzy of attention. In the past week alone, two mutual funds struck their own deals to wade deeper into the world of alternative assets.
On Thursday, T. Rowe Price Group Inc. unveiled a $4.2 billion deal to buy Oak Hill Advisors, embracing a credit-focused firm in a rare acquisition beyond its core mutual fund business. On Monday, Franklin Resources Inc. said it would buy Lexington Partners, a private equity fund manager, for $1.75 billion, a move that will result in it overseeing $200 billion in alternative assets.
Brigade has found itself in prominent distressed-debt situations, leading negotiations for control of companies on the brink of or in bankruptcy, including Guitar Center Inc. and IHeartMedia Inc.
That’s led to thorny brawls in credit markets. As a lender to Ronald Perelman’s makeup giant Revlon Inc., the firm joined a group in opposition to the company’s efforts to rework its debt. It then found itself with a $175 million-dollar mistaken payment sent by Revlon’s bank, Citigroup Inc., which Brigade refused to return. Citigroup sued Brigade in an attempt to recoup its money, but has been blocked from reclaiming its cash.
Lazard advises clients across the globe on mergers, capital-raising and restructurings. It led luxury retailer Neiman Marcus Group Inc. and Eddie Lampert’s Sears Holdings Corp. through bankruptcy as lead investment bank.
The asset-management arm of the bank recently launched a new fund that invests in investment-grade, high-yield bonds in Europe and North America. Lazard’s asset-management arm managed more than $270 billion in client assets as of September, according to a statement Monday.
By Sridhar Natarajan and Katherine Doherty
