Sector developments and company hires

ESG exclusion checklist unveiled
The European Leveraged Finance Association (ELFA) has launched an ESG exclusion checklist for business activities, which aims to streamline the negative screening and exclusion process for CLO managers. The checklist is designed for arranging banks to complete at the time of a new corporate loan or bond syndication to help investors quickly determine if a corporate borrower is a suitable investment candidate based on their ESG criteria. It will also allow the corporate borrower to publish the data to its entire syndicate.

The ESG exclusion checklist provides information on the percent of revenue that a company derives from a range of areas that might touch on an investor’s internal ESG guidelines. Areas for consideration include weapons, tobacco, thermal coal, fossil fuels, gambling, hazardous chemicals and waste, intensive farming and palm oil.

The checklist also includes a specific section for utilities companies, asking the corporate borrower to declare the percentage of electricity generated by thermal coal, liquid fuels (oil), natural gas and nuclear generation. Corporate borrowers may also indicate if they are a signatory of the UN Global Compact principles and if they are in breach of any of the principles.

The checklist was produced as a collaborative effort across ELFA’s Loan Investor Committee, CLO Investor Committee and ESG Committee. The association is consulting with market participants on the checklist until 15 December and plans to release a final document in January 2022, following the consultation period. The tool will then be updated on a biannual basis to ensure it remains relevant and in line with latest market trends.

EMEA
Gallagher Re has hired Theo Norris as a dedicated cyber ILS broker, having previously worked as ILS avp at Aon Securities. Norris marks the tenth new hire in cyber reinsurance at the global reinsurance broker this year, and will lead the firm’s development of new and alternative capacity in the growing cyber ILS market.

Global
AXIS Capital Holdings has announced two new hires amid the expansion of its ILS team. The new appointments will join the recently rebranded capital unit at AXIS, in a bid to enhance global services for both clients and investors.

Patrick Witteveen will join the team in Zurich as the new head of AXIS ILS business development, effective 1 February 2022. He has over 20 years of experience and was most recently head of investor relations and business development at Securis Investment Partners.

Additionally, Kyle Freeman joins the firm as the new head of ILS structuring, property, in Boston - effective immediately. He was recently head of North America programmes pricing at AXA XL.

Italian NPL acquisition agreed
Banca Ifis has completed a record acquisition of non-performing loans from Cerberus for a total of €2.8bn, marking the largest true sale of NPLs in Italy this year and enabling the bank to reach its 2021 target for NPL portfolio acquisitions, equal to approximately €3bn. The stock comprises approximately 300,000 unsecured loans originated by Italian banks and financial institutions. The receivables - due from retail customers - mainly derive from consumer loan contracts.

As a result of this transaction, the Banca Ifis Group’s proprietary portfolio now stands at a nominal amount of €21.8bn. This is in addition to €3.4bn in management on behalf of third parties.

Structured finance group formed
Blackstone has formed a structured finance group, which brings together Blackstone Real Estate Debt Strategies (BREDS) and the firm’s various asset-backed finance activities. The formation of this combined group is expected to drive further scale in Blackstone’s lending capabilities across a variety of asset-backed finance markets, including consumer finance, real estate, transportation, trade receivables, fund finance and digital infrastructure.

Jonathan Pollack, currently global head of BREDS, has been named global head of the structured finance group. Timothy Johnson, currently global head of originations for BREDS, will become global head of BREDS, overseeing all commercial and residential lending activities.

Rob Camacho will continue to lead the firm’s investment activities in asset-based finance. Mike Wiebolt, who currently manages the real estate group’s liquid securities activities, will now also manage ABS.