Published in London & New York
10 Queen Street Place, London
1345 Avenue of the Americas, New York
Creditflux is an
company
© Creditflux Ltd 2025. All rights reserved. Available by subscription only.
News
News in brief
Need for scale fuels BDC consolidation
Business development companies (BDCs) — a popular type of private credit fund vehicle — have been merging to gain scale and lower costs, and more consolidations are expected in 2025.
The trend picked up last year. Asset managers such as Carlyle, Nuveen and Blue Owl all inked M&A deals for their BDCs, which provide private credit loans to US companies.
“Now they find all the operating efficiencies… I think there is a trend of just scaling up,” said Watson Tanlamai, vice president for North American Financial Institution Ratings at Morningstar.
Part of the driver for M&A is a growth spurt over the past few years and a maturation of the sector. The BDC industry has seen assets under management surge 35% year-on-year, to reach USD 407bn across 159 funds in the third quarter of 2024, according to the LSTA.
Shareholders particularly benefit when affiliate BDCs — those operated by the same manager — merge to create a larger, more diverse entity, said Larry Herman, managing director at Raymond James. This is because larger vehicles have lower financing costs.
Expenses are also lowered as managers blend together operations, for example by relying on a single auditor. The combined portfolio can increase diversification and lower the risk associated with a single investment, which becomes a smaller portion of the whole.
Merging BDCs from different managers can be tricky, however. Unaffiliated public BDCs need to solicit votes from shareholders — most of whom are retail investors — so marshalling a sufficient number of votes is challenging, Tanlamai said.
Top stories on creditflux.com: senior teams change at JPMorgan and Investcorp
7 January
JPMorgan names CLO leaders to replace senior departures
JPMorgan promoted from within to renew its CLO team leadership, with the firm’s EMEA CLO head Steve Baker named to lead the global business after three of its most senior CLO bankers abruptly decamped to SMBC Nikko in October.
The new JPMorgan CLO leadership team (left to right): Jane Park, Jake Pollack, George Blair, Steve Baker, Lacey Vigmostad
6 January
Blue Owl delays launch of opportunistic credit fund
The private credit behemoth paused fundraising for its upcoming fund as it evaluated the market opportunity.
7 January
US CLOs wrap up record-breaking recovery year in 2024
2024 was a healing year for CLOs, with the overall size of the BSL market remaining largely static, despite gross issuance hitting its highest-ever level.
8 January
Euro CLOs consolidate in 2024 with an eye to future growth
While European CLOs posted a record for overall new origination in 2024, plenty of amortising deals meant that the overall size of the market remained stable.
8 January
HPS fundraises to invest in new CLOs
Following a raft of CLO fund launches in 2024, HPS made two registrations for CLO funds in Luxembourg, according to filings.
13 January
Bank of America sees ‘seriously elevated’ global uncertainty
The underlying CLO outlook remains positive, said analysts at a Bank of America round-table, but global uncertainty is the main risk to European markets in 2025.
13 January
Blue Owl raises more than USD 2bn for evergreen direct lending strategy
The alternative asset manager’s sophomore direct lending fund focuses on senior, first-lien loans.
15 January
Investcorp Credit’s Jeremy Ghose and Tom Shandell set to exit
A shake-up of the firm’s leadership saw head of global credit Jeremy Ghose and head of liquid credit investments Tom Shandell announce their departures.
20 January
HPS, BlackRock, Palmer Square and Sona prepare European CLOs
The European CLO market began 2025 strongly, with a double-digit number of deals marketed.
21 January
European market sees burst of ETF launches
CLO ETFs are gaining traction in Europe, with 2025 already seeing announcements from Janus Henderson and Palmer Square.
22 January
Corinthia Global Management secures USD 5bn in capital commitments
The start-up aims to begin deploying capital soon.
29 January
Investor demand boosts CLOs, but loan tightening may pose challenges
A massive tightening wave has seen CLO spreads narrow dramatically since the start of the year, but leveraged loans have fallen even further, which may eventually erode the arb and hamper deal-making.
30 January
AGL seeks to enter European CLO management
US alternative asset shop AGL is interviewing CLO specialists as it prepares to start up in Europe.
Past returns
Not as tight as we thought
The CLO market flirting with post-GFC tights prompted us to look back to 2018, when US BSL triple A spreads dipped below 100bps.
Back then, the London Interbank Offered Rate (Libor) was the benchmark for most US floating-rate assets, including leveraged loans and CLOs, so any comparison of yields before 2022 must take account of the switch to SOFR.
Take BlackRock Magnetite XX, which priced in March 2018 as a 2Y/5Y with triple As at 93bps over three-month Libor. After conversion, we get to 119bps over SOFR — so it wasn’t actually below 100bps in today’s terms.
Points up front
Melanoma event debuts in London
Over 600 movers and shakers in the UK’s leveraged finance and private equity communities turned out in force at the National Gallery in Trafalgar Square last month for the inaugural London benefit for Leveraged Finance Fights Melanoma (LFFM). It marked the first international expansion for LFFM, which since its first event in Manhattan in 2012, has become a marquee event on the New York financial calendar.
As well as coming together to support the Melanoma Research Alliance (MRA), the world’s largest non-profit, non-governmental funder of melanoma research, attendees also heard from those whose lives had been directly impacted by research into the disease.
LFFM was founded in 2011 by Veritas Capital’s Brendan Dillon and General Atlantic Credit’s Jeffrey Rowbottom, who had both been diagnosed with the disease. Since then, it has generated more than GBP 22m to support MRA’s research agenda, with the London event on 29 January raising GBP 1.4m.
“The money raised by LFFM London will have a transformative impact on our mission,” said Stephanie Kauffman, president of the Melanoma Research Alliance. “This generous support allows us to continue our investments in brilliant UK-based researchers, providing them with the crucial resources they need to push the boundaries of melanoma research, driving forward innovations that bring us closer to a cure.”
Leveraged Finance Fights Melanoma: the gala raised GBP 1.4m for Melanoma Research Alliance
