Regulation is driving another small bank out of a compliance-heavy business.

Triumph Bancorp in Dallas has agreed to sell Triumph Capital Advisers, a firm that manages collateralized loan obligations, to Pine Brook, a private-equity firm that specializes in the financial services and energy sectors.

The sale should free the bank holding company from risk retention rules, which should benefit shareholders, Aaron Graft, the $2.6 billion-asset Triumph’s CEO, said in a press release tied to the sale.

Triumph has been dealing with the Dodd-Frank Act’s “skin in the game” rule, which requires issuers and managers of asset-backed securities to keep 5% of the economic risk in their deals. In theory, the rule aligns incentives for issuers and investors in hopes of improving the quality of securitized assets.

The requirement, which took effect in December, has been a tall order for firms that collect management fees and have negligible balance sheets of their own. Smaller managers have been forming majority-owned investment vehicles to bring in outside investors to help finance risk retention stakes or selling to firms with bigger balance sheets.

“The implementation of risk retention has increased capital requirements for CLO managers, creating a need for strong management teams to attract significant amounts of equity capital,” Bharath Srikrishnan, Pine Brook’s managing director, said in the press release. “Pine Brook was formed … to provide management teams with the capital they need to build their businesses.

Triumph Capital was created in early 2013 when Triumph Bancorp hired Gibran Mahmud and Kurt Plumer from Highland Capital Management, a CLO manager in Dallas. The firm had two issues in 2014, totaling $816 million.

Triumph Capital obtained management contracts for two CLOs as part of Triumph Bancorp’s March 2015 purchase of certain Doral Financial assets from the Federal Deposit Insurance Corp. Doral, which was based in Puerto Rico, had failed a month earlier.

The firm, however, has been relatively inactive since completing a $409 million issue in June 2015. It manages just $1.5 billion in CLOs; those securities were grandfathered because they were issued before the rule kicked in.

The sale to Pine Brook should be a “a major milestone” that will allow Triumph Capital to expand its CLO platform and product offering, Mahmud, the firm’s chief investment officer, said in the release.

Triumph did not disclose the price Pine Brook will pay for Triumph Capital. As part of the transaction, Pine Brook will provide a $250 million line of equity to Trinitas Capital Management, a vehicle formed to help CLOs comply with risk retention rules.

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