The Carlyle Group is expected to announced on Thursday that it will buy the TCW Group, a Los Angeles-based investment manager, from Société Générale of France, according to a person with direct knowledge of the matter.
Carlyle is expected to partner on the deal with TCW's management team, which will increase its already substantial stake in the investment firm, this person said. The buyout firm plans to buy TCW as a portfolio company, rather than adding it to its own operations.
The transaction will conclude a months-long sales process for TCW, which has some $130 billion in assets and counts some of the nation's biggest pension and endowment funds among its clients. The company sold a controlling stake to Société Générale in 2001 for about $880 million.
Under pressure to raise additional capital, the French bank has been exploring the divestiture of noncore assets. Several private equity firms had participated in an auction of TCW, people briefed on the matter said previously, with Carlyle taking the lead in recent weeks.
For the past two years, TCW has been locked in a lengthy legal battle with Jeffrey Gundlach, the former head of its fixed-income department. It fired Mr. Gundlach, one of the nation's most prominent bond investors, in December 2009 following a lengthy feud.
TCW subsequently sued Mr. Gundlach for breach of fiduciary duty and theft of trade secrets, accusing him and several members of his team of stealing confidential client data and proprietary trading systems to set up a new firm, DoubleLine Capital. More than 40 TCW employees eventually followed Mr. Gundlach to DoubleLine. Mr. Gundlach counter-sued, arguing that he was owed millions of dollars in unpaid fees for his work at TCW.
In September, a jury in Los Angeles delivered a mixed decision in the civil trial, finding Mr. Gundlach liable for breach of fiduciary duty, but also awarding him $66.7 million in damages in the countersu it. Later this month, a federal judge will decide whether TCW is entitled to more than $80 million in royalties from Mr. Gundlach.
Despite some of its legal triumphs, TCW has struggled to maintain its prominence since Mr. Gundlach's departure. To help replace the team that formed DoubleLine, TCW purchased Metropolitan West Asset Management in 2009.
News of the transaction's timing was reported earlier by The Wall Street Journal.
