French Bank Offloads Asset Manager TCW Group to Carlyle Group

A trio of Am Law 100 firms have landed advisory roles in a deal announced Thursday under which private equity firm The Carlyle Group is acquiring asset manager TCW Group from French bank Societe Generale.

While financial terms of the transaction were not disclosed, Bloomberg reports that the sale values Los Angeles–based TCW (short for Trust Company of the West) at between $800 million and $900 million. Societe Generale took its controlling stake in the asset manager in 2001 for about $880 million, according to The New York Times.

The equity for the deal is coming from two Carlyle funds and TCW’s management, which is increasing its TCW stake to 40 percent, according to a joint release issued by Carlyle and TCW. The transaction is expected to close in the first quarter of 2013.

The Times reports that the 31-year-old TCW, which has $130 billion in assets under management, has been on the auction block in recent months as Societe Generale looks to shed noncore assets.

All three entities turned to familiar firms for legal counsel on the matter: Simpson Thacher & Bartlett for Washington, D.C.–based Carlyle; Skadden, Arps, Slate, Meagher & Flom for Societe Generale; and Debevoise & Plimpton for TCW management.

Marc Stern, who served as TCW’s CEO until Thursday, worked as an attorney at Debevoise in the 1970s. The deal announcement issued by Carlyle and TCW says Stern will become chairman of a newly formed TCW Board of Managers, while David Lippman, previously group managing director and head of fixed income at the company, will succeed Stern as CEO.

Simpson Thacher serves as a frequent adviser to Carlyle, including advising the firm on its proposed initial public offering. (The American Lawyer earlier this year explored an unusual clause—since removed—contained in Carlyle’s offering plan that would have required investors to settle any securities disputes in individual arbitrations rather than via the filing of proposed class actions.)

Skadden has worked on nearly two dozen deals for Societe Generale over the past several years, according to a firm spokesman. Those transactions include the 2009 acquisition of Metropolitan West Asset Management by the bank and TCW Group. (As Bloomberg notes, that move came after bond trader Jeffrey Gundlach’s controversial firing from TCW. Gundlach went on to form a new company, DoubleLine, with more than 40 former TCW employees.)

Skadden’s other Societe Generale assignments include both litigation and transactional matters, including the negotiation of a lease for 400,000 square feet of New York office space in 2010, and its ongoing representation of the bank in suits filed by the Federal Housing Finance Agency against 17 banks that seek to recover billions of dollars in compensation for alleged mortgage-backed securities losses suffered by Fannie Mae and Freddie Mac during the financial crisis.