AllianceBernstein pays $750M for CarVal Investors, a former money unit of Cargill

CarVal Investors, the Twin Cities-based investment manager that branched off from Cargill a few years ago, is being acquired by AllianceBernstein for $750 million.

As a subsidiary of the Nashville-based company, it will be rebranded as AB CarVal Investors, the companies said Thursday.

CarVal's headquarters will remain in St. Louis Park, where it employs about 110 people at offices the firm moved into last year. It was previously located in Hopkins.

It has another 80 employees in New York, London, Singapore and Luxembourg.

Lucas Detor, a managing principal at CarVal, said there will be no job cuts and the firm's senior leaders are staying with the company. The firm will maintain its investment autonomy, too.

"So no one is going anywhere," he said. "It's the same people, doing the same thing in the same places — only better."

The transaction is expected to close in the second quarter. In addition to the $750 million purchase price, the deal includes a prospective payout of another $650 million to CarVal shareholders if certain performance targets are reached over the next several years.

"We ended up finding all of these interesting areas of overlap," he said, leading them to decide to join forces.

As part of the transaction, the life insurer Equitable, which has a 65% stake in AllianceBernstein, committed to investing $750 million in CarVal strategies. That will give CarVal access to a lower cost of capital, Detor said.

"That's going to allow us to access and be more relevant in a part of the market that we haven't been," he said. "We believe that's going to allow us to do more deal flow and that's going to benefit all of the stakeholders at CarVal."

CarVal will also benefit from AllianceBernstein's resources in areas such as cyber security and technology as well as global distribution, he said.

AllianceBernstein executives said the deal will build its private alternatives business to $49 billion in assets under management.

It has about 300 institutional investors globally as clients, including pension funds, sovereign wealth funds, insurance companies and family offices.

The agribusiness giant Cargill started CarVal in 1987. It became an independent subsidiary in 2006.