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Global credit funds & CLO's
April 2024 | Issue 263
Published in London & New York.
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Opinion
April 2024 | Issue 263
Past returns
A lesson learned
Do you remember when a failing French corporate giant, one of the largest names in the European loan market, wreaked havoc on CLOs? We are of course talking about Vivarte, which defaulted ten years ago with nearly EUR 2bn of debt written off.
At the time, 84% of European CLOs included loans issued by the company, and many saw their equity valuations slashed. By April, we were reporting on b-wics that had positions marked down by almost 30 points.
It’s a good thing European CLO managers no longer take concentrated positions in shaky French companies.
Points up front
CIFC reveals what it saw in TEAK
CIFC’s CLO Initiative for Change caught out attention last month when the philanthropic program that supports “organisations driving social, economic or environmental change through newly issued CIFC CLOs” made a major donation when CIFC Funding 2024-II priced. As part of that program, CIFC, RBC, Appleby, Allen & Overy and Milbank made a collective donation of USD 225,000 to the TEAK Fellowship.
We thought there might be a heart-warming story of why CIFC chose TEAK, perhaps based on deep personal connections, but the answer was a little more prosaic.
According to the firm, after partnering with Black Girls Code for the initial CLO Initiative for Change donation, CIFC was looking for a New York charity to enable the firm to get more involved with the organisation beyond the monetary contribution. TEAK, CIFC says, stood out as a good fit and a well-run charity.
Despite the pragmatic start, TEAK and CIFC have clearly hit it off. For the past two summers, CIFC partnered with TEAK to host week-long workshops at CIFC’s New York City office, for prospective college students interested in pursuing a career in financial services.
And this summer, once again, TEAK Changemaker Fellows will immerse themselves in a series of educational presentations and team building activities focused on life at CIFC and careers in investment management.
Wood you like a career in financial services? Then maybe you should try CIFC’s TEAK program
THEY SAID IT
“Our estimates indicate that once we adjust for fees and risks, private debt funds provide their investors with returns just appropriate for the risks they face, but not more”
Isil Erel, Thomas Flanagan & Michael S. Weisbach got headline writers the world-over excited with a paper published in the NBER called “Risk-Adjusting the Returns to Private Debt Funds”.
