TCW Group is being purchased by the private equity firm Carlyle Group, though under the deal employees of the L.A.-based firm will assume a 40 percent position. In addition, TCW's head of fixed income David Lippman will become president and chief executive. The seller is French banking giant Société Générale, which has been cutting costs and selling assets in order to meet the new banking requirements related to the European debt crisis. Actually, Société Générale has been looking to unload TCW for some time. From the WSJ:
The TCW sale represents the single-biggest asset sale for Société Générale since it embarked on its deleveraging plan, said a Société Générale spokesman. It also represents the sole business unit the bank has sold in that time; other sales have largely been loan portfolios. The plan the bank unveiled last September to dispose of toxic assets was aimed at reaching a 9% core Tier 1 ratio--a key measure of a bank's financial strength--by the end of 2013 under international rules known as Basel III, that are being phased in over coming years.
TCW, which is short for Trust Company of the West, manages about $130 billion in investments through various equity and fixed-income funds. For non-money people, TCW is best known for alleging that its former super-star bond trader Jeffrey Gundlach had stolen trade secrets to set up his own firm. Gundlach then counter-sued. A jury reached what was essentially a split decision. A lawsuit over Gundlach's firing was settled out of court.