Eric Brown, head of Performance Trust's Institutional Group, answers SCI's questions

Q: Performance Trust announced its entry into the CLO market with the creation of its new CLO trading desk last month (SCI 11 April). What makes now the right time?
A: CLOs are something that we’ve been looking into for quite some time now and figuring out the right time for us to get involved isn’t necessarily market-based, but instead it’s about finding the right people to lead that effort. One of the things that is really important to us is truly partnering and serving the clients that we face, and when we spoke with the Cross Point team, they not only understood that but they embodied that.

I’ve interviewed many people over the last five years and when I met with the Cross Point Capital team, I could tell immediately that it had a very different feel to it. They are a team who started their own broker-dealer and so they know what it is like to really help and serve clients in a way that really solves clients’ issues – and that isn’t always the case.

Q: And what are you hoping to be able to bring to the CLO market?
A: We really want to serve our clients, through what we call a very ‘high touch’ approach. No matter how big or small the space is, there’s always opportunity to help your client solve the problems it’s facing and meet their needs.

We aren’t trying to be something we are not – we know exactly who we are, the types of clients we can serve, and exactly how to do that. We have a history of almost 30 years doing precisely that at Performance Trust and we believe that going in and entering the CLO market and providing that same type of service to clients in this space too will bode well for our firm.

Q: What makes Performance Trust suited to tackling the challenges in the CLO market that maybe its competitors cannot?
A: Any time you enter markets like this, where there’s fear, there’s opportunity. A lot of clients need help, and they want to partner with people they can trust to keep their best interests in mind.

Many people see these markets as being challenging or difficult. But we really see it as a great opportunity to partner with these clients because when they know you have their best interest at heart, it changes the tone and structure of the conversation.

In times and markets where things are really fluid and good, we will still be involved, but we can’t necessarily have the impact that we really want to have in these spaces. Whereas in markets like CLOs, we feel like the opportunity for us there is as high as it has ever been.

There’s a lot of uncertainty, dislocation and confusion, and people are questioning who they can trust to help them – who they can lean on. We do our best work when we enter markets like this, where we have a real level of expertise – and with the Cross Point team, we can bring that to our customers, to our platform, and we can hopefully grow that worldwide.

Q: What attracted Performance Trust to the CLO market?
A: CLOs are probably one of the last structured products we’ve not yet been involved in. We are heavily involved in securitised products, including MBS, both on the residential, agency, non-agency and commercial sides of that market.

We’ve really built on our structured finance expertise internally and, of course, CLOs are something that we’ve looked at before – it’s a sector with plenty of opportunity. But you can’t enter into a new sector by just declaring that you’re entering into it. You need to have true professionals on side that are experts in their space, that have longevity and have built up a great brand in their space – which is exactly what the Cross Point team has done.

Q: How do you hope experience in other structured finance products will better Performance Trust’s efforts in the CLO market?
A: We’ve learnt in our close to 30 years of business that opportunities really grow from building up good relationships and trust with your clients. As a firm, we want to be at the table, sitting with our clients and helping them. After doing this in other sectors, we’ve been able to provide expertise and insight that has allowed our clients to win long term – and when our customers win, we win.

Claudia Lewis