Third Point, an alternative investment manager with $12 billion in assets, has announced a definitive agreement to acquire AS Birch Grove LP, a diversified alternative credit fund manager. Founded in 1995 by CEO Daniel S. Loeb, Third Point focuses on event-driven investments in equities, venture capital, and credit strategies, including structured, performing, distressed, and private credit. The acquisition of Birch Grove marks a significant strategic move for Third Point, ending American Securities’ ownership of Birch Grove and making it a subsidiary of Third Point.
Expansion of Credit Capabilities
Third Point’s Growing Credit Solutions
Since its inception, Third Point has established itself as an influential player in the world of alternative investments, particularly focusing on credit securities. The firm holds a significant portion of its assets in credit securities and introduced dedicated credit fund offerings in 2020. This strategic emphasis on credit has bolstered its portfolio, allowing it to navigate various market conditions effectively. In 2024, Third Point further diversified its investment strategy by launching Malibu Life Re, a life-and-annuity insurer, expanding its expertise into other liability-driven investing businesses as well.
The acquisition of Birch Grove is expected to significantly enhance Third Point’s credit capabilities, offering more comprehensive services to its investors across a broader range of asset classes. With Birch Grove’s established reputation in managing collateralized loan obligations (CLOs), opportunistic private credit solutions, multi-strategy credit, senior loans, and high-yield bonds, Third Point investors are set to benefit from more diverse and robust investment opportunities. Established in 2013 by CEO Jonathan Berger and President Andrew Fink, Birch Grove manages approximately $8 billion in assets, with over $5 billion of its current assets under management (AUM) dedicated to CLO investments.
Integration of Birch Grove’s Expertise
Post-acquisition, Jonathan Berger will retain his role at Birch Grove while also becoming Co-Head of Credit at Third Point, alongside Third Point Partner Ian Wallace. This collaboration is anticipated to create a powerhouse in the credit investment space, with Wallace, Shalini Sriram (Head of Structured Credit), Chris Taylor (Head of Private Credit), and Stephen Schatzman (Head of Opportunistic Credit) continuing to lead their respective strategies. Although Birch Grove and Third Point’s existing funds will be managed separately, Berger will collaborate closely with Loeb, Wallace, Sriram, Taylor, and Schatzman to develop new products that leverage the firms’ complementary strategies.
The Birch Grove team, which includes 17 credit analysts and five credit origination professionals, will continue their roles under the leadership of Berger and Fink. This seamless integration is expected to foster continuity and stability, ensuring that both entities can leverage their collective expertise to create compelling investment solutions for their clients. The acquisition not only bolsters Third Point’s credit division but also reinforces its commitment to delivering superior returns to its investors by expanding its pool of industry experts.
Financial and Legal Advisors
Advisory Roles in the Acquisition
The acquisition of Birch Grove by Third Point was facilitated by several key advisory roles. Jefferies acted as the sole financial advisor to Third Point, providing crucial insights and guidance throughout the transaction. Legal counsel for Third Point was provided by Willkie Farr & Gallagher, ensuring that all legal aspects of the acquisition were meticulously handled. Birch Grove, on the other hand, received financial advice from GreensLedge Capital Markets and legal counsel from Schulte Roth & Zabel, contributing to a smooth and informed transaction process.
American Securities, the former owner of Birch Grove, also enlisted expert advice from Weil, Gotshal & Manges to navigate the complexities of the acquisition. The involvement of these esteemed financial and legal advisors underscores the strategic importance and scale of this acquisition. Their collective expertise ensured that the transaction was executed with precision, reflecting the high stakes and transformative potential of this deal for all parties involved.
Strategic Rationale and Future Outlook
Third Point, an alternative investment firm managing $12 billion in assets, has announced a definitive agreement to acquire AS Birch Grove LP, a diversified alternative credit fund manager. Founded in 1995 by CEO Daniel S. Loeb, Third Point is known for its focus on event-driven investments. These investments span a variety of areas including equities, venture capital, and a range of credit strategies. The latter includes structured finance, performing and distressed credit, as well as private credit solutions.
The acquisition of Birch Grove signifies a major strategic development for Third Point, positioning it strongly in the alternative credit space. It marks the end of Birch Grove’s ownership under American Securities, transitioning it to become a subsidiary of Third Point. This move is expected to enhance Third Point’s capabilities in managing diversified credit investments, further solidifying its standing in the market. With this acquisition, Third Point aims to leverage Birch Grove’s expertise and broaden its investment portfolio, contributing to its overall growth and expansion strategy.
