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News
News in brief
Investors are complacent despite rising recession risk, says Eagan
The Trump administration disrupted the established world order, but the consequences of reduced free trade, lower immigration and increasing fiscal spending have yet to be fully reflected in investors’ actions, Loomis Sayles portfolio manager Matt Eagan told host Lisa Lee on the Credit Exchange podcast in early July.
“Nobody thinks these policy moves will really upset the apple cart,” said Eagan, who leads the USD 80bn full discretion team. “To me, that’s the risk.”
Investors remain complacent because the effect of recent policies has yet to appear in economic data. They are a bit too short-term focused, he added.
“The chances of a recession are very elevated right now, but I don’t think it has really shown in the economic data,” Eagan said.
Investors do not have a lot to look forward to in the second half of the year, but opportunities in fixed income still look pretty good, he continued. Real rates are high, and fixed income investors can stay in the intermediate part of the curve.
“You can earn very good carry there,” Eagan said. “Just roll down the curve and flip it out as rates go higher. In this market, reinvestment rate risk is your friend.”
Managers do not need lower credit quality to find good returns. For private market funds and interval funds, the returns are even higher with relatively low duration, he said. Compare that to equities, which are suffering from very high multiples that will be a drag on future returns.
“There’s a case to be made they could actually outperform equities for a period of time,” Eagan said.
Top stories on creditflux.com: legal moves and an acquisition in New York
22 July
Proskauer Rose bolsters global finance ranks with veteran hire
The law firm has added Larry Berkovich to its structured credit ranks in New York as it furthers the expansion of its global finance practice. The two-decade veteran of CLOs joined Proskauer as a partner. He was previously at A&O Shearman.
Berkovich: the latest in a string of recent structured credit and finance recruitments for Proskauer. Other new partners include Alexandra de Padua, Frank Oliver and Heather Viets.
30 June
State Street Investment Management eyes CLO entrance
The firm’s asset management unit has focused on broadening its offerings to increase management fees and counter outflows.
30 June
Sound Point hires former Alcentra president as CFO
Sound Point Capital Management has hired former Alcentra president and CEO Dan Fabian as its new chief financial officer. He replaces Kevin Gerlitz, who is retiring.
1 July
Abry Partners readies new CLO business
The middle market private equity firm has opened up a warehouse, according to a source familiar.
7 July
Royal London gears up for debut CLO issue later this year
The firm has opened a warehouse facility and is looking to price its first deal in September via Goldman Sachs, according to sources familiar.
8 July
European CLO portfolio manager departs Partners
Senior portfolio manager at Partners Group in London, Till Schweizer, has left the firm. Co-portfolio manager Josy Mazzucchiello will take over as head of the Penta CLO platform.
9 July
Reckoner Capital Management unveils first-ever levered CLO ETF
Reckoner Leveraged AAA CLO ETF will use short-term reverse repurchase agreements to create a modest amount of leverage.
10 July
Carlyle rolls out investment grade private debt fund
Carlyle has launched an evergreen fund focused on asset-backed finance investments.
11 July
Seven managers make up 90% of private credit fundraising
According to a Morningstar Equity report, the seven largest US managers accounted for 90% of the capital raised for private credit in the past five years.
16 July
Man Group to acquire CLO and private credit manager Bardin Hill
Man Group agreed to purchase New York-based Bardin Hill, the credit manager formerly known as Halcyon Capital Management.
17 July
EC securitisation proposals ‘a big step in the right direction’
A group of industry experts are optimistic that new regulations could boost European securitisation markets by making sell-side due diligence easier to carry out.
21 July
Kartesia eyes Europe
Asset manager Kartesia is seeking to establish a CLO management business in Europe.
28 July
Morgan Stanley loses head of direct lending
Jeff Levin has left Morgan Stanley Investment Management. Ashwin Krishnan becomes the sole head of North America Private Credit.
Past returns
No sign yet of a CBO wave
This time last year, Creditflux reported on Shenkman pricing the first CBO — collateralised bond obligation — in two years.
At the time, the firm’s CIO Justin Slatky indicated the market could soon see a boom in CBOs. “We would anticipate being very active in the CBO market to the extent the high yield market remains higher quality and capturing volatility can create excess return,” he said.
Twelve months on, Shenkman has issued the first CBO of 2025, with a similar structure to last year’s. But it seems conditions are not yet right for a wave of issuance.
CBOs fell out of favour after the poor performance of the first crop some two decades ago. Maybe investors have long memories.
Points up front
The growing sports investing club
When ‘Ted Lasso’ first aired, much of the show’s humour came from an outsider trying to turn an English Premier League soccer team around. But in the world of finance, outsiders taking stakes in sports teams has become a serious business worth around USD 3tn.
“There’s nothing more compelling than live sports,” Mark Attanasio told Lisa Lee on the Credit Exchange podcast. The co-founder of Crescent Capital Group is also the majority owner of English football team Norwich City (‘the Canaries’) and the principal owner of the Milwaukee Brewers, a Major League Baseball team.
But sports investing is not for the faint of heart and winning is not so easy.
“Start by being careful about ego purchases, even as a minority,” Attanasio warned. Many teams lose year-to-year, and valuations may grow but there may not be distributions.
There are also major differences between sports. English football, in particular, is a bit like investing in public companies, said Attanasio. It is difficult to take a long-term view: one must think about current performance. It affects everything from the players a team can recruit to how much money comes in. And you can get relegated.
US sports are more predictable. Major League Baseball is the best baseball in the world. Recruiting top players is not nearly as difficult for the Brewers as it is for the Canaries (who compete in the second tier of English football).
Brewers and Canaries: the baseball and soccer teams have an owner in common — but little else
