Babson Takes on MCM

Springfield and Boston, Mass.- based Babson Capital Management has acquired Murray Capital Management (MCM), a distressed debt and special situations management outfit based in New York.
The purchase marks Babson Capital’s third acquisition in six years. Babson Capital acquired its Charlotte-based U.S. bank loan team from Wachovia Corp. in 2002 and its London-based European bank loan business Babson Capital Europe from Duke Street Capital in 2004.
Marti Murray, MCM’s current president, portfolio manager and senior research analyst and her team will join Babson Capital and will report to Cliff Noreen, head of Babson Capital’s corporate securities division and vice chairman of the firm.
Royal Bank of Scotland analysts said that consolidations in this market segment are likely to continue. “Of 60 managers of European CLOs alone, a great number of which were in their infancy when the market ground to a halt last year, we expect the number of active CLO managers to contract to somewhere close to 10 to 15,” they said. “Investors are shunning all but the most experienced, better capitalized managers, and these firms are set to grab a great deal of market share in the coming 6 to 12 months, especially as fear of defaults sets in.”
Some of the consolidation will be in the form of acquisitions of a companies and others will simply involve assuming responsibility for management of specific deals as in the case of Babson, which had already taken over management of 10 CDOs since 2003.