Bermudian-based holding company Assured Guaranty Ltd has announced the completion of the combination of substantially all of its asset management business, other than Assured Healthcare Partners LLC, with Sound Point Capital Management LP, the alternative asset management firm.

As part of the transaction, Assured Guaranty has contributed its entire equity interest in Assured Investment Management LLC and, with certain AHP-related exceptions, its related asset management entities (collectively, AssuredIM) to Sound Point, effective July 1, 2023.

In addition, the investment agreement under which US insurers Assured Guaranty Municipal Corp and Assured Guaranty Corp engaged Sound Point as their sole alternative credit manager to invest $1 billion over time in alternative credit strategies managed by Sound Point, is now effective; this amount includes the approximately $400 million that was previously managed by AssuredIM.

Assured Guaranty received a 30 per cent ownership interest in Sound Point’s combined business, subject to potential post-closing adjustments.

With the combination of assets, Sound Point becomes the fifth largest global CLO manager by AUM.

Dominic Frederico, president and CEO of Assured Guaranty, said: “Our investment in Sound Point should provide significant incremental value as we expect the combined business will benefit from Sound Point’s scaled investment platform, as well as both firms’ established distribution channels and well-earned reputations for generating attractive returns for their investors.”

He added: “Our 30 per cent investment in the combined firm advances our earnings diversification strategy through a compelling asset management business that we believe will grow and generate significant net income and free cash flow. We believe that Sound Point’s proven track record managing investments will be strengthened by the addition of AssuredIM.”