General Electric Co.’s lending arm hired Ralph Betz from Bank of Ireland Plc to head leveraged finance in Germany as the company seeks to take market share from rivals hamstrung by the sovereign debt crisis.
GE Capital’s European leveraged-finance unit is pushing to expand by arranging more leveraged financing for mid-sized companies and buying assets from other banks, according to Paul Scott, chief investment officer and head of sponsor coverage for Europe, the Middle East and Africa. Frankfurt-based Betz will report to Scott.
GE Capital has a 1.2 percent market share in arranging European buyout loans this year, compared with 0.8 percent in 2011, according to data compiled by Bloomberg. The European leveraged-finance unit is also looking to add people for transaction execution to support deal originators across the region, Scott said.
“A number of European banks are retrenching from acquisition finance and where they are still playing there is more of a domestic focus which in turn has allowed us to take meaningful market share on a pan-European basis,” London-based Scott said in a telephone interview. “We can offer access to capital markets liquidity in the U.S. for private-equity firms’ European and trans-Atlantic buyouts.”
The top 10 European banks for leveraged loans have a combined 44 percent market share this year, compared with 51 percent in 2007, Bloomberg data show.
The Stamford, Connecticut-based lender acquired about $1 billion of leveraged loans from Royal Bank of Scotland Group Plc last year before the European Central Bank pumped 1 trillion euros ($1.3 billion) into the financial system, taking pressure off banks to sell assets at depressed prices.
“It is a bit frustrating from our point of view that the liquidity injected into the system as a result of the Long Term Refinancing Operations has removed some of the short-term pressure for banks looking to delever,” Scott said. “We believe LTRO doesn’t solve the fundamental problem of bank balance sheets and the deleveraging trend, so we are still actively looking for opportunities to grow the size of our European leveraged finance book, currently at about 6 billion euros.”