Carlyle Group LP (CG) is expected to announce soon that it has
struck a deal to acquire asset manager TCW Group Inc., according to
people familiar with the matter.
Los Angeles-based TCW, which has about $127 billion in assets
under management, is majority owned by France's Societe Generale SA
(SCGLY, GLE.FR). A deal could be announced as soon as market close
Thursday in Paris.
TCW employees already own a sizeable chunk of the firm, and in
this deal their position will increase, said people familiar with
the matter.
France's second-largest bank by market value, Societe Generale
has been cutting costs and selling assets to free up cash to help
it meet new capital targets imposed on European banks that are
intended to help them better weather a financial crisis. Societe
Generale set a goal in September of freeing up 4 billion euros
($4.9 billion) by selling assets.
In addition, Paris-based Societe Generale has been pulling back
from the asset-management business in recent years, both in its
home country and abroad. It earlier divested its asset-management
businesses in Korea and the U.K.
Societe Generale acquired a controlling stake in TCW in 2001 for
about $880 million. It subsequently boosted its stake to the point
that it currently owns about 85% of the firm.
Earlier this month the bank wrote down the value of its position
in TCW by EUR200 million.
The bank said in 2009 that it planned eventually to spin off TCW
in a stock offering, but later that year hired Citigroup Inc. to
explore strategic options for the asset manager. That development
accelerated the firm's acrimonious split with its star bond trader,
Jeffrey Gundlach, who managed about 60% of TCW's assets.
TCW and Mr. Gundlach took to the courts over his dismissal. TCW
said Mr. Gundlach stole trade secrets from the firm. Mr. Gundlach
claimed that he and others who left with him were owed millions in
back wages.
Following a high-profile, seven-week trial, a jury awarded Mr.
Gundlach $66.7 million and also found for TCW, though the matter
was settled out of court before a judge could rule on TCW's request
for $82 million in damages.
Mr. Gundlach went on to found fixed-income investment firm
DoubleLine Capital LP, which manages about $30 billion.
TCW, meanwhile, replaced Mr. Gundlach and his team by acquiring
Metropolitan West Asset Management LLC in December 2010 for $300
million, closing the deal about three months later. MetWest had $30
billion in assets under management at the time it was acquired.
Write to Ryan Dezember at ryan.dezember@dowjones.com
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