MINNEAPOLIS — Cargill has signaled its exit from the asset management business with the announcement it has agreed to sell its ownership and economic interest in CarVal Investors L.L.C. to a partnership comprised of the firm’s senior management team. Financial terms of the sale were not disclosed.
Founded in 1987 by Cargill, CarVal is an alternative investment fund manager that became an independently managed subsidiary of Cargill in 2006. CarVal has $10 billion in assets under management in corporate securities, loan portfolios, structured credit and hard assets.
The transaction is expected to close in the fourth quarter of calendar 2019, pending consents to the change in control from investors in CarVal’s funds.
“Cargill is pleased to sell our interest in CarVal to the senior team that has successfully managed the firm for the past three years,” said Jay Olson, corporate vice-president and treasurer of Cargill and chairman of the CarVal board of directors. “We reached this decision through a collaborative process and are confident that CarVal will thrive as an employee-owned business.”
Lucas Detor, James Ganley and Jody Gunderson, managing principals of CarVal, have led the firm for three years following their appointment as executive team by the CarVal board of directors in June 2016. The three are responsible for strategic direction, investments and operations globally. As part of the purchasing partnership, they will continue to hold these duties going forward. Meanwhile, Mr. Olson will step down as chairman of CarVal once the transaction closes in October.
Following the completion of the management buyout, Cargill said it will remain invested in several of CarVal’s 23 funds. Cargill, which had been receiving approximately 20% of CarVal’s revenues from investment fees, will no longer receive revenues following the sale. Instead, the new employee-owned partnership will receive all revenues, CarVal said.
“We appreciate the trust, confidence and support that Cargill has given to the CarVal team over many years,” Mr. Detor said. “We expect a smooth transition and remain focused on serving our investors with excellence, integrity and strong performance.”
J.P. Morgan acted as exclusive financial adviser to Cargill on the transaction.