DISTRESSED DAILY: Birch Grove and Ascribe Combine Credit Forces

Two investment firms that have combined forces to capitalize on dislocations in credit markets are planning to target private debt, collateralized loan obligations and convertible bonds.

Birch Grove Capital, founded in 2013 by alumni of Stone Tower Capital, and Ascribe Capital, the credit business of private equity firm American Securities, merged earlier this month to form AS Birch Grove, which will have about $5 billion in combined assets under management, with about $1 billion earmarked to invest in the near term in opportunistic credit.

The firm is looking to lend to middle-market companies that may have short-term liquidity ...