NEW YORK EIG Global Energy Partners LLC said on Tuesday it had sued asset manager TCW Group Inc over the latter's takeover by private equity firm Carlyle Group LP (CG.O).
EIG is the private equity firm whose dealings with Chesapeake Energy Corp (CHK.N) contributed to the energy company's restructuring its governance.
EIG, which was spun off by TCW in early 2011, contends the deal with Carlyle, which was announced on August 9 and is expected to close in the first quarter of 2013, violates certain contractual rights granted to EIG as part of its separation from TCW.
The dispute evolves around a joint venture between EIG and Los-Angeles based TCW that was put in place at the time of the spin off to act as a central clearing house for sharing some of the economics of EIG's funds with TCW.
EIG Chief Executive R. Blair Thomas said in an interview that had a generalist private equity firm, such as Hellman & Friedman LLC, been selected as an investor in TCW, EIG would have raised no objections. Carlyle, however, is a major investor in the energy sector, he said.
"We have no beef with Carlyle, it's not their fault that they are a competitor. But the joint venture with TCW obligates us to provide to them EIG fund and asset level data, more than what our limited partners see, they would get to see everything," Thomas said.
Washington, D.C.-based EIG said its complaint, filed in federal court in the Central District of California, seeks to prohibit the transaction until its claims challenging it on various grounds are resolved in arbitration.
"We do not comment on matters in arbitration. This is an excellent transaction for TCW, its clients and its employees, and we are confident it will go forward on schedule," a TCW spokesman said. Carlyle declined to comment.
Carlyle's energy funds had $16 billion of assets under management while EIG had $10.6 billion of assets under management as of the end of June. Overall, Carlyle had $156.2 billion of assets under management.
Paris-based Societe Generale (SOGN.PA) agreed to sell its stake in asset manager TCW Group Inc to Carlyle and TCW management and employees, clearing up questions over TCW's ownership following years of speculation about a sale.
"Hopefully cooler heads will prevail and there will be some negotiated resolution. If not, an arbiter will finally make the decision. Either they will say the transaction can go forward or it can't," EIG's Thomas said.
EIG was thrust in the spotlight in April after Reuters reported on loans that the private equity firm had made to Chesapeake CEO Aubrey McClendon, one of the energy sector's most high-profile chief executives who subsequently resigned as the company's chairman but remained CEO.
(Reporting by Greg Roumeliotis in New York; Editing by Tim Dobbyn and Bob Burgdorfer)