Manulife Investment Management has signed an agreement to acquire the London-based multi-sector alternative credit manager CQS, under undisclosed financial terms.
Once the deal is closed in early 2024, the Toronto-headquartered asset manager will absorb CQS' credit platform, which holds $13.5bn in assets under management.
The firm will retain the CQS investment philosophy and process and distribute its offerings to broader client segments and geographies, while CQS will benefit from the firm's "strong capital base" to support growth across its strategies, it said.
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Paul Lorentz, president and CEO at Manulife IM, said: "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' capabilities are a complement to our existing fixed income and multi-asset solutions business and a powerful addition to our global credit offering."
Soraya Chabarek, chief executive officer at CQS, said the firm had found the "ultimate long-term partner" in Manulife.
"We share a client-focused culture, and the support of its strong platform and global distribution combined with the autonomy of our investment teams will ensure we continue to strive to deliver attractive long-term returns to our client base," she said.
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CQS was founded in 1999 by Michael Hintze as a hedge fund manager. Over the last decade, it has evolved into a multi-sector credit platform, offering alternative credit strategies such as corporate credit, ABS, CLOs, regulatory capital, convertible bonds and structured credit.
Following the transaction, Chabarek and CIOs Craig Scordellis and Jason Walker will continue to lead the firm, with Manulife IM acquiring the brand to create a co-branded logo, Manulife | CQS Investment Management.
Hintze's founder's hedge fund, the Directional Opportunities fund, and related mandates are not included in the deal. He will be forming his own firm, where he will continue to manage his fund on behalf of investors.
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"I am delighted that CQS has found the right partner in Manulife Investment Management. 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," he said.
"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."
