New Amsterdam in Talks for Its First European CLO Fund Since ’08
New Amsterdam Capital Management LLP, a London-based money manager founded in 2002, is seeking to raise its first European collateralized loan obligation since 2008.
The firm is in talks with banks to raise a 300 million-euro ($391 million) CLO by the end of this year, John Seal, a London- based founding partner of New Amsterdam, said in a telephone interview.
New Amsterdam is among money managers seeking to revive CLO issuance in Europe as the average spread on top-rated portions of the funds tightened to 150 basis points on Feb. 22 from 300 basis points a year ago, according to Wells Fargo & Co. Last month Cairn Capital Ltd. priced a 300.5 million-euro CLO, the first deal in Europe since 2011, according to data compiled by Bloomberg. Pramerica Investment Management Ltd. hired Barclays Plc to raise a 300 million-euro fund.
“We have investors interested in the equity piece of a new CLO and this really only started to happen about four months ago,” Seal said. “It’s a very encouraging sign. The key to success will be sourcing a sufficient amount of assets in a timely fashion.”
The quarterly cash payment to the so-called equity piece, or the riskiest portion, of European CLOs rose to an average of about 3.1 percent last year, the most since 2008, according to Citigroup Inc. CLOs are a type of collateralized debt obligation that pool high-yield, high-risk loans and slice them into securities of varying risk and return. A basis point is 0.01 percentage point.
New Amsterdam raised 825 million euros in 2006 for its Mercator I and Mercator II CLOs and 300 million euros for Mercator III in 2007, Bloomberg data show. It sold about 640 million euros of bonds for NAC EuroLoan CLO in 2008.
To contact the reporter on this story: Patricia Kuo in London at firstname.lastname@example.org
To contact the editor responsible for this story: Faris Khan at email@example.com