Palmer Square Explores Sale of $37B Credit Management Business

Kansas-based credit investment firm Palmer Square Capital Management is reportedly considering a divestiture of its substantial credit management operations. The firm, co-founded by Chris Long and Angie Long, has engaged advisors to navigate a potential sale process, with preliminary offers already submitted by interested parties. While discussions are confidential and a transaction is not guaranteed, the move signals a significant strategic evaluation for the rapidly growing asset manager.

Founded in the wake of the 2008 financial crisis by Chris Long with an initial $10 million investment, Palmer Square has experienced remarkable expansion. The firm's assets under management now stand at approximately $37 billion, a testament to its strategic growth and market penetration. A significant portion of this AUM, around $27 billion, is attributed to its robust collateralized loan obligation (CLO) platform, according to data from S&P Global Ratings. Beyond CLOs, Palmer Square also maintains a presence in opportunistic credit, private credit, and operates a publicly traded business development company.

The CLO market, a key driver of Palmer Square's growth, has seen considerable expansion, becoming a cornerstone of the global leveraged finance ecosystem. The U.S. CLO market alone has swelled to over $1.3 trillion, more than quadrupling its size over the past fifteen years. This substantial market growth has created significant opportunities for established managers like Palmer Square to scale their operations and generate consistent fee-based revenue streams, a model that has proven highly attractive to institutional investors.

The leadership of Palmer Square, Chris Long and Angie Long, bring extensive experience and deep roots in the credit markets. The couple's professional journey began at JPMorgan, where Angie Long played a pivotal role in developing the bank's credit derivatives business, eventually rising to managing director at a young age. Today, she serves as Chief Investment Officer, while Chris Long holds the positions of Chairman and CEO, guiding the firm's strategic direction.

A sale of this magnitude could reshape the competitive dynamics within the credit management sector. The private credit space, in particular, has attracted substantial capital, with managers seeking scale and diversification. Recent transactions in the broader asset management industry, such as Silver Lake's combination of Cegid and Silae for over $10 billion and Warburg Pincus and Berkshire Partners' $11.75 billion sale of CPP, underscore the ongoing consolidation and strategic M&A activity within financial services.

The potential sale of Palmer Square's credit management business highlights the increasing maturity of the private credit market and the strategic options available to successful firms. As asset managers navigate evolving market conditions and investor demands, such strategic reviews are becoming more common, offering opportunities for both sellers seeking liquidity and buyers looking to expand their capabilities and market share.