from 8/15 release:
B. Proposed Funds to be Managed by AC LLC Subsidiaries
As noted above, the Company has evolved into a global alternative asset manager and in connection with these operations, the Company has proposed that it be permitted to manage additional assets through its continued ownership of AC Energy, ACEIGP, AC Debt, ACE3GP and ACEM3. These newly formed subsidiaries of AC LLC were created in an effort to grow the Company’s assets under management and to include in its assets under management both additional broadly syndicated loans and investments in CLO securities and global energy and infrastructure assets, such as power generation facilities, power distribution and transmission networks, energy transportation assets and fuel production opportunities.
AC Energy and ACEIGP are proposed to advise a private fund that would invest in global energy and infrastructure assets. The Company will not be a co-investor with the fund proposed to be managed by AC Energy and ACEIGP, but, as part of the fund’s initial closing, the Company expects to acquire approximately $200 million.
The Company also proposes that AC Debt advise a publicly traded, closed-end investment company that will elect to be regulated as a business development company under the 1940 Act (“Debt BDC”). Debt BDC is expected to invest primarily in Leveraged Loans and CLOs. As part of Debt BDC’s initial public offering, the Company will acquire shares of Debt BDC’s common stock at the initial public offering price in a private placement, subject to the limitations under Section 12(d)(1) of the 1940 Act. The Company will be contractually limited in its ability to dispose of these shares for a period of time to be determined.
ACEM3 and ACE3GP are proposed to advise a private equity fund that would acquire equity interests currently held by the Company in certain of the Company’s existing portfolio companies and would also include a commitment for future equity investments. As with the creation of ACE I and ACE II, the sale of the Company’s existing portfolio companies to the private fund would be negotiated in an arms-length transaction with unaffiliated third parties that will hold limited partnership interests in the private fund. The Company will invest in the fund with regards to its commitment for future equity investments. Such co-investments will be on a set percentage and consistent across all such investments. In addition, the Company may elect to be a minority investor in the fund with regards to its investment in existing portfolio companies.
From where I sit, this isn't just huge, it's freaking ENORMOUS. Am I reading too much into it, or should I be buying Jan 2015 leaps with both hands?
The 40-APP/A of 8/15/13 spells out their restructuring strategy (and it looks an awful lot like NMB's prediction, (tip of the hat!)).
I feel kinda like a kid on Christmas! The lack of response to this is a little surprising, so again- am I missing something? (happens all the time!)
And I always count on you to decipher them. Good to see you back. I would like to see ACAS file for the infrastructure entity soon. They are bidding on a project as of current and have already presented in Africa at at conference
Fund manager American Capital eyes 1st Phl investment
By Donnabelle L. Gatdula, The Philippine Star
Posted at 08/10/2013 10:57 AM | Updated as of 08/10/2013 10:57 AM
MANILA, Philippines - US-based fund manager American Capital Energy & Infrastructure has expressed interest to bid for Power Barges 101-104, the top official of the Power Sector Assets and Liabilities Management Corp. (PSALM) said.
PSALM president and CEO Emmanuel Ledesma Jr. said this would mark the first time American Capital would enter the Philippine energy market.
He said the asset management company is the only foreign firm that signified keen interest in the bidding.
“Based on my recollection, it (American Capital) is a first-time investor (in the Philippine energy industry),” Ledesma said.
American Capital, a publicly-traded private equity firm and global asset manager, has with $112-billion total assets under management. From its eight offices in the US and Europe, American Capital and its affiliate, European Capital consider investment opportunities from $10 million to $750 million.
It likewise invests in energy infrastructure assets in high-growth and developed markets, including power generation facilities, gas and power distribution and transmission networks, energy transportation assets, and fuel production opportunities, and product and service companies focused on the power and energy sector.
The company said it seeks to invest between $50 million and $200 million in a given opportunity, but has the capability and resources to consider even larger investments.
“The team actively seeks opportunities to invest in corporate divestitures, acquisitions of portfolio companies of private equity firms, acquisitions of family-owned or closely held businesses, going-private transactions, and ownership transitions,” it said.
American Capital specifically targets both minority and control equity investments in energy infrastructure such as power generation facilities, coal, natural gas, hydro, and renewables.
Thanks for this post. The entire filing is fairly thick reading, at least I will need several re-reads to digest all the parts. They may be complicating the "risk" away from the shareholders but it is get murkier.
Here are all the titles of the including the subs:
AMERICAN CAPITAL, LTD.,
AMERICAN CAPITAL ASSET MANAGEMENT, LLC,
AMERICAN CAPITAL MORTGAGE MANAGEMENT, LLC,
EUROPEAN CAPITAL FINANCIAL SERVICES (GUERNSEY) LIMITED,
AMERICAN CAPITAL ENERGY & INFRASTRUCTURE MANAGEMENT, LLC,
AMERICAN CAPITAL LEVERAGED FINANCE MANAGEMENT, LLC and
AMERICAN CAPITAL EQUITY MANAGEMENT, LLC
Thank you so much blankwillie. It looks as though the big restructuring is finally at hand. If I understand correctly, it looks as though Blackstone Group (BX) will be the closest thing to the restructured company as an alternative asset manager. Presumably, existing shareholders will gain stakes in AC LLC as the overall manager (or AC LLC will simply remain as a wholly-owned subsidiary of ACAS), in Debt BDC in exchange for the debt assets the company is giving up (those of us eager to see a dividend again will finally see one, enhanced by the new bdc's ability to leverage its balance sheet), and possibly in the private equity funds (although this is unclear given restrictions on private equity ownership). It is possible that ACAS proper will receive payments from the new private equity funds--via AC LLC--in exchange for the equity interests it is transferring. Presumably, ACAS itself will still be able to use its tax losses going forward.
While the details of the restructuring remain to be spelled out, this is wonderful news for shareholders.
Sentiment: Strong Buy
Holding you are correct. Acas is doing what is necessary to grow its business while reducing share count. Tax losses are protected. The ACAS complex is transparent and undervalued. Execution risk aside...I focus on GDP growth and share repurchases and I think we will be handsomely rewarded with the ultimate restructuring. Stay the course!