Henderson Global Investors is creating a department to structure tailored equity and credit products, in response to increasing demand for total rather than benchmarked returns. The move also reflects the rise of cross-asset class structuring and mirrors the decision by banks, such as Merrill Lynch (DW, 22/02), to merge credit and equity desks.
The six-strong Investment Solutions group, headed by Dominic Powell, inherits GBP10 billion (USD18 billion) notional of deals under management and will look to expand on this. One of the projects the nascent department is already working on is a collateralized debt obligation of asset-backed securities and CDO tranches which it is marketing with Deutsche Bank. The CDO, called Asgard, is expected to be priced in July and closed in August. Henderson will likely work increasingly with banks on structures such as open-ended funds, in which the banks can use Henderson's asset management expertise.
The Investment Solutions group comprises staffers with backgrounds in CDOs, leveraged loans, structuring and equity derivatives. "We have a long-standing position in the market," noted Powell, adding the size of the group's business will help get the best prices for customers. He added that the fund manager plans to hire four more staffers.