All the latest company developments and new hires in the structured finance sector

Acquisitions

HPS Investment Partners has acquired Tålamod Asset Management. HPS will retain Tålamod's investment team and other employees based in Dallas, while Andersen Fisher, founder and managing member of Tålamod, will join HPS as md. Kyle Mapes and Jay Steen will join HPS as executive directors, after joining Tålamod in 2008. All employees of Tålamod will become HPS employees in 4Q18.

Marsh & McLennan Companies (MMC) has reached an agreement to acquire Jardine Lloyd Thompson Group (JLT). Following the completion of the transaction, Dominic Burke, group chief executive of JLT, will join MMC as vice chairman and serve as a member of MMC’s executive committee. Under the terms of the transaction, holders of JLT’s common shares will receive cash consideration of £19.15 per share. Total cash consideration equates to US$5.6bn in fully diluted equity value, or an estimated enterprise value of US$6.4bn. The transaction will be funded by a combination of cash on hand and proceeds from debt financing and MMC has committed bridge financing from Goldman Sachs. The transaction is expected to close in spring of 2019, subject to receipt of required antitrust and regulatory approvals and the approval of JLT shareholders.

BDC no-action relief

GC Advisors has received a no-action letter from the US SEC in connection with proposed CLO transactions by Golub Capital BDC and Golub Capital Investment Corp. The letter confirms that, under the risk retention rules, the GC Advisors is considered to be the sponsor of the BDCs’ CLOs and therefore the transactions comply with the risk retention requirements.

CLO equity investment

Fair Oaks Income’s FOMC II fund has acquired in the primary market US$26m notional of equity and US$5.7m of class F notes - representing 62.5% of each class - in the HPS 13-2018 CLO. Managed by HPS Investment Partners, the CLO's current target portfolio has a principal value of US$510m across an expected 255 unique bank loan issuers, with an expected weighted average exposure per issuer of approximately 0.47%. The estimated potential total return for this investment, blended across both note classes, is between 14% and 15% per annum.

Europe

Arrow Global Group has hired Tim Tomlinson as UK head of client development. At Arrow Global, Tomlinson will cultivate relationships with key UK creditor clients and collaborate with the pan-European origination team regarding ongoing client developments and forthcoming transactions. His most recent role was head of new business at PwC.

Cheyne Capital Management has hired Richard Cazenove as partner and senior portfolio manager to the Cheyne group's strategic value credit (SVC) business. Cazenove’s role follows 15 years at BlueBay Asset Management where he worked across distressed and opportunistic credit strategies.

Reed Smith has hired David Barton to the firm’s financial industry group (FIG) as counsel, based in London. He will advise on structured debt, securitisation and other asset-backed debt capital market transactions. Barton, who will arrive in late September, joins the firm from NatWest Markets, where he served as managing legal counsel.

FHFA rule proposal

The Federal Housing Finance Agency (FHFA) is issuing a proposed rule to require Fannie Mae and Freddie Mac to align programmes, policies, and practices that affect the prepayment rates of TBA-eligible MBS. The objective of the proposed rule is to enhance the overall liquidity of enterprise TBA-eligible MBS by supporting their fungibility without regard to which enterprise is the issuer. The rule would apply to both the enterprises' current offerings of TBA-eligible MBS and to the new Uniform Mortgage-Backed Security (UMBS) which will be implemented in June 2019. FHFA, as conservator, has previously responded to industry input received during development of the Single Security Initiative by imposing alignment mandates on the enterprises and publishing a prepayment monitoring report.  The proposed rule would codify the alignment mandates and, in turn, indicate to market participants that FHFA will require that the enterprises seek to maintain consistent prepayment rates. FHFA invites interested parties to submit comments on the proposed rule via FHFA.gov within 60 days of publication in the Federal Register or via mail to their office in Washington D.C.HFA proposal.

Illimity launched

Italian special acquisition vehicle SPAXS has completed its purchase of 99.2% of Banca Interprovinciale through paying approximately €44.7m in cash (representing about 79.9% of the bank’s share capital), plus the contribution to SPAXS of the bank’s shares (representing approximately 19.3% of the bank’s share capital). The transaction is intended to create a new bank named illimity, which will specialise in the Italian SME market and aims to become a leading operator in the UTP and NPL (secured and unsecured) sectors. The board consists of nine members: the ceo Corrado Passera (formerly the ceo of Intesa Sanpaolo); the chair Rosalba Casiraghi; and the directors Massimo Brambilla, Giancarlo Bruno, Elena Cialliè, Bob Diamond, Sigieri Diaz della Vittoria Pallavicini, Alessandro Gennari and Maurizia Squinzi.

ILS

Fidelis Insurance has appointed Richard Brindle, chairman and group ceo, to the additional role of group chief underwriting officer while Ben Savill, previously group chief underwriting officer, will leave to pursue other opportunities. To support the underwriting teams, Patricia Roufca, group general counsel, will assume the new and additional role of coo while Hinal Patel, group cfo, becomes ceo of Fidelis Insurance Bermuda.

Maiden Lane liquidated

The New York Fed has sold the remainder of its Maiden Lane Securities holdings (SCI passim). Net proceeds from past sales, conducted by BlackRock Solutions, as well as cashflow the securities generated while held in the portfolio enabled the full repayment of the New York Fed’s loan, plus interest, on 14 June 2012 and of the subordinate loan JPMorgan made to ML, plus interest, on 15 November 2012. The New York Fed’s management of the portfolio resulted in a net gain of US$2.5bn, including interest of US$765m, for the benefit of the public. ML will retain minimal cash to meet any trailing expenses in order to facilitate an orderly wind-down.

New venture

Waterfall Asset Management has announced the launch of its Specialty Commercial Finance Group (SCFG).  SCFG, led by Andrea Petro, has been established to provide high yield senior secured debt to specialty commercial finance companies. Petro, who began her career at Transamerica Business Credit, has spent 17 years with Wells Fargo’s capital finance's lender finance division.

US

Benefit Street Partners has hired Stephen Sachman and Patrick White as mds to its private debt origination team. Sachman will be based in the firm’s New York office while White will work in the firm’s newly established San Francisco office. Prior to joining Benefit Street, Sachman spent 12 years as md at BlackRock, whereas White was previously at md and co-head of technology at Monroe Capital.

Owen Butler is to lead BlackRock’s US CLO business. Butler, who took over the role last month following Scott Snell’s departure, is based in New York and reports to James Keenan and Tim O’Hara, co-heads of global credit. Butler was previously a member Blackrock’s financial advisory group and before joining the firm he was head of credit risk at LBBW Asset Management Ireland, overseeing structured credit products and corporate and financial investments.

Crayhill Capital Management has hired Stefan Hoefer as md and will be a senior member of Crayhill's investment team. His responsibilities will include helping to source, underwrite, structure, execute and manage private credit investments. Prior to joining Crayhill, he was a senior analyst on the multi-strategy team at BBT Capital, where he focused on investing across the capital structure.

Morgan Stanley has moved Paul Burke, its co-head of loan solutions, to New York as part of a new initiative to win more business from US financial institutions. The new initiative will include looking at NPLs, re-performing loans, low margin and high LTV business. Burke will report to Jon Walton, head of structured finance, and work alongside the other co-head of loan solutions, Noreen Whyte, who remains in London.

Geoffrey Jones and Gabriel Goldstein have both been hired by PIMCO to the role of evp and portfolio manager. They will both be based in the firm’s Newport Beach office and will focus on private and opportunistic credit investments, including corporate lending, special situations, and distressed credit. They will report to Marc Seidner, md and cio of non-traditional strategies. Jones and Goldstein both join PIMCO from Tennenbaum Capital Partners where they were mds.

Tetragon Credit Income Partners has hired Scott Snell, the former co-head of BlackRock’s US CLO business, as a portfolio manager. The firm is considering investing across the capital structure and may set up separately managed accounts or other opportunistic funds to invest in CLO debt, potentially in both the US and Europe.