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Opinion

June 2021 | Issue 235

Thomas Majewski,

Founder & managing partner

Eagle Point Credit Management

Opinion CLOs

How CLO managers optimise the value of reorg equity is one of the most important unasked questions

Opinion ESG

Technology won’t replace human judgement. In ESG a qualitative review is necessary

Fatima Hadj,

Chairwoman, structured finance advisory board

Principles for Responsible Investment

Opinion ESG

We should be mindful of the transfer of power to the C-suite that inheres in ESG

Duncan Sankey,

Portfolio director and head of credit research

Cheyne Capital

Opinion Direct lending

Having multiple sources of data for investors is particularly helpful in opaque markets like private debt

Randy Schwimmer,

Head of capital markets and origination

Churchill Asset Management

Opinion

Credit derivatives

In the afternoon I awoke from a pile of willow leaves to discover we had created a Welsh ether-based token

Welshcake,

welshcake@acuris.com

Opinion Multi-strategy credit

Don’t buy loans for the floating rate component alone

Matt Eagan,

Portfolio manager and co-head of full discretion team

Loomis Sayles

Past returns

Having a whale of a time in tranches

In Creditflux 10 years ago we reported on JP Morgan’s “little known prop book” making waves in index tranches.

JP Morgan was selling protection on seven-year CDX HY equity after having built a short position in this tranche. This caused the tranche to sell off on 17 May 2011 while other parts of the CDX HY equity curve were largely unmoved.

We reported that Bruno Iksil was overseeing correlation trading for JP Morgan’s CIO. About a year later, the bank announced trading losses of $6.2 billion, with Iksil dubbed the ‘London whale’.

Iksil left JP Morgan in 2012 and has maintained that he warned officials at the bank about the growing risk attached to its credit derivatives portfolio.

Points up front

Waterway to name and brand your CLO

When taking over a CLO launched by another firm, CLO managers face a dilemma: how do you re-brand it so it’s clear it’s one of your CLOs, but not so much that it fudges your personal track record? Well, HPS Investment Partners has found a neat balance.

The firm has acquired Bardin Hill Investment Partners’ European CLO platform, which includes six self-named CLOs. HPS, which used to be part of Highbridge Capital Management, styles its European CLOs under the Aqueduct banner, because the High Bridge in New York, was originally an aqueduct.

In keeping with this it has decided to rename the former Bardin Hill CLOs as Segovia CLOs. Segovia in Spain has a famous Roman aqueduct.

But Welshcake wonders why Pontcysyllte Aqueduct in Llangollen, Wales didn’t come under consideration. They think it rolls off the tongue rather well.

Highly liquid: the Segovia aqueduct carried water into the city for almost 2,000 years

CLO Initiative For Change

Well done CIFC Asset Management and other counterparties to a new US CLO, which donated $145,000 to Black Girls Code, an organisation mentoring young girls of colour. This donation was made under a new programme, CLO Initiative for Change, which shortens to CIFC.

Coincidence or not, it is a noble cause to stand for (and sounds better than the business-like Commercial Industrial Financial Corporation).

THEY SAID IT

“The board announces the discovery of a website purporting to represent Volta”

Axa Investment Managers’ listed fund Volta Finance says there is a website falsely claiming to represent it.

CLOs at a glance

How CLO managers optimise the value of reorg equity is one of the most important unasked questions

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Global credit funds & CLO's

June 2021 | Issue 235

Published in London & New York.