Sector developments and company hires

Aegon AM buys CLOs, inks partnership
NIBC is set to sell its European CLO management activities to Aegon Asset Management, further accelerating its strategy to streamline its business model and focus on asset-backed financing. The sale comprises NIBC's North Westerly CLO platform in its entirety - including the NIBC CLO team, collateral management of three outstanding CLOs with assets under management of circa €1.2bn and associated risk retention positions in the three CLOs - for an undisclosed consideration.

This transaction provides the North Westerly platform and its stakeholders with a strong basis for further growth under Aegon AM ownership, which fully supports the North Westerly platform's strategy. Closing of the transaction is expected in June.

Meanwhile, Aegon AM has entered into a strategic partnership with Lakemore Partners that aims to expand Aegon AM's credit capabilities through the growth of its US CLO platform. Simultaneously, the partnership grows Lakemore's repertoire of top-tier institutional clients.

Under the terms of the agreement, Lakemore will make multiple investments in Aegon AM's CLO capability, providing equity for the issuance of multiple CLOs in the coming years. In return, Lakemore will gain preferred access to Aegon AM's pipeline of new issue CLO transactions, allowing for enhanced certainty of execution and a path towards significant growth.

In other news…

EMEA
Allen & Overy has promoted structured finance counsel Pietro Bellone to partner within its Milan finance department. He joined the firm in November 2014 and was previously a senior associate at Chiomenti, having trained at Clifford Chance.

Simmons & Simmons has promoted managing associate Marcin Perzanowski to partner in its derivatives and structured products practice, based in London. He joined the firm in April 2019 from Mayer Brown, where he was counsel.

Landlord ‘exodus’ to drive Irish BTL prepays
A number of factors will help sustain already high buy-to-let prepayments and three-month conditional prepayment rates (CPRs) in Irish RMBS backed by predominantly BTL loans, according to S&P. In particular, the agency cites an exodus of landlords from the Irish private rental sector and the government recently lifting its eviction ban, which should see more landlords selling their BTL properties.

S&P notes that the weighted-average three-month CPR for some of its rated Irish BTL RMBS more than doubled from 1Q22 to 1Q23, as mortgage borrowers feel the strain from rising inflation and interest rates. Several seasoned BTL loans are now on tracker or variable rates, meaning borrowers are paying substantially more on their mortgage repayments, exposing them to payment shock.

The Society of Chartered Surveyors reports that 40% of house sales in 4Q22 were due to landlords leaving the market. Residential Tenancies Board data verify this, with 11,868 notices of termination in 2022 and 7,067 outlining the purpose was to sell the property.

Landlords have benefitted from over a decade of house price appreciation and are now looking to cash out. A cohort of borrowers that experienced a decade of significant negative equity also now have equity available and can sell.

Pan-European RE platform expands
Arrow Global has acquired Eagle Street Partners, a real estate asset manager and developer focused primarily on the UK and Ireland. This acquisition will support one of Arrow Global’s core investment strategies, which - alongside direct lending and opportunistic credit - focuses on European real estate. Eagle Street’s team is led by co-founder and ceo Shane Scully and coo Peter Gavican.  

The acquisition of Eagle Street builds on Arrow’s long-term strategic relationship with the firm since its inception and provides Arrow with additional origination and asset management capabilities. Founded in 2020, Eagle Street’s current portfolio has a total GDV of €1.1bn and the firm has offices in Dublin and London.   

The acquisition of Eagle Street complements Arrow Global’s existing pan-European real estate offering, which includes Maslow Capital in the UK, Norfin in Portugal, Vesting Finance in the Netherlands, and both Sansedoni and Europa Investimenti in Italy.