Cargill Inc. sells CarVal Investors LLC, an investment fund manager, to the company's executives in a transaction that marks its exit from the asset management industry.

The processor and marketer in agriculture began to reduce its position in financial services in early 2016 by selling its business to Black River Asset Management into three independent companies.

CarVal was created by Cargill in 1987 and today manages $ 10 billion in assets. Cargill made it an independent subsidiary in 2006 so that CarVal could accept and manage outside investor funds. Since then, she has grown rapidly and has specialized in distressed and credit intensive assets.

The new owners will be the three CarVal General Managers – Lucas Detor, James Ganley and Jody Gunderson – and 14 other senior executives. "We will actually be the same people, doing the same things, in the same places," Detor said. "We are not making any changes to our real estate or operational footprint. So, really, run our business like we did before, trying to get the best return for our investors. "

In recent years, Cargill, the largest privately held company in the United States in terms of revenue, has divested a number of companies to focus on its core business, which is more clearly aligned. The sale terminates Cargill's position as a third-party fund manager.

"CarVal, while a very well managed and successful company, operated as an independent subsidiary of Cargill," said Lisa Clemens, Senior Director of Investor Relations at Cargill. "Cargill has always worked in the financial services industry and we will continue to be, as is our important risk management business. But CarVal is really a fund manager, which is a little further. "

CarVal will continue to head to Hopkins, where it employs approximately 100 people, as well as offices in London, New York and Singapore.

Several years ago, the three CarVal General Managers presented Cargill management with a proposal: if the giant agribusiness sector ever wanted to sell the subsidiary, they would be interested in a management buyout, or MBO.

Cargill came back to see the leaders last summer to see if they were still interested in this acquisition. This led to discussions, which led to the agreement. The terms have not been disclosed. The agreement should be finalized in mid-October.

"We always told Cargill that we felt we were the best group to own and run this company, and they agreed," said Detor.

Although Cargill will no longer hold any interest in CarVal, it will retain its investments in the company's funds.

CarVal manages funds in corporate securities, loan portfolios, structured credit and sustainable assets. Recently, the company focused on clean energy by investing more than $ 1 billion in commercial and industrial solar power, residential solar lending portfolios and storage, as well as guaranteed investments in the industry. clean energy.

The company is also heavily invested in aviation and aircraft. CarVal owns Aergo Capital, an aerospace company that leases and markets commercial aircraft to airlines, a capital-intensive sector.

JPMorgan acted as Cargill's exclusive financial advisor for the transaction.