CIC aims to join list of new European CLO managers

Shant Fabricatorian

CLOs

After last year’s eye-catching European debuts from seven new managers, attention has turned to this year’s impending crop of debutants.

According to market sources, at least five firms are understood to be looking to price inaugural deals in Europe this year. These include Fortress, Muzinich, Serone Capital, DWS (the asset management arm of Deutsche Bank), and the private debt arm of French group Crédit Industriel et Commercial (CIC).

In most of these cases the ‘debutant’ description seems something of a misnomer. For example, while any prospective deal would be the first CLO for CIC as a manager, Steve Dunn, the firm’s head of private debt and European CLOs, London, is keen to emphasise that CIC Private Debt — a separate entity to CIC the bank — has been active in this space for well over a decade. He views the move into CLO management as a logical step.

“This is our first CLO, but our 16th fund since our inception 20 years ago. The underlying collateral from the large-cap strategy is the same,” he says. “We have EUR 3.5bn AUM, and we’ve been doing leveraged loans for years.

“Essentially, we’re keen to show investors that we’re a part of the ecosystem of the CLO community, through our long track record investing in leveraged loans, as well as investing consistently in third-party CLOs.”

“We have been doing leveraged loans for years”

Steve Dunn, Head of private debt and European CLOs | CIC Private Debt

Every new manager needs to differentiate themselves in a crowded marketplace. For Dunn, CIC Private Debt’s strength is in credit-picking.

“Capital preservation and team stability are our main differentiators, along with CIC Private Debt being embedded in the leveraged loan and CLO markets,” he says.

“Our cumulative default rate over the past seven years in the large-cap space — going through Covid, Ukraine, and so on — is zero percent. So we are relatively conservative, and the team have been through multiple economic cycles together.”

It’s these factors, he says, along with long-standing relationships with the leading arranging banks, that allow CIC Private Debt to have allocation rates comparable to tier-1 managers, which should allow it to ramp efficiently. Having opened a warehouse in January, the firm is targeting the third quarter to price its first deal.

While Dunn has been with CIC for almost two decades, there has been movement elsewhere in the industry as other managers gear up for their debuts.

Dan Robinson, formerly of Man Group and CIFC, moved to DWS in November, as EMEA head of alternative credit, while Michiel von Saher announced in December he was joining his former colleague Steven Paget at Serone Capital. The pair previously worked together at both Angelo Gordon and PGIM.

Last year, European market debuts included Arini, Sona Asset Management, CarVal, Pemberton, Signal, Canyon Partners and M&G Investments. Among those, Arini has turned heads by already returning to the market, pricing Arini European CLO II in mid-March.

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