Aladdin Capital Management will open a London office in the coming weeks and has hired Peter Allan, senior managing director, from NIB Capital Bank, to head up the soon to be formed, Aladdin Capital Management (UK). Allan will start May 8. Aladdin has been working on the project for about six months and the timing was based on identifying the right individual to head up the effort and having an operation of enough scale to justify opening a London office, said George Marshman, a principal at Aladdin.
Marshman said the decision to set up the European venture was based on deal flow and where assets are pricing. "I think there is less institutional participation in the European market as compared to the U.S. market [and this] is really an effort to diversify and build a franchise, and to be involved in and do more deals," he said. The move is also in response to Aladdin's investors, who encouraged the move.
To staff the venture, it may relocate one senior analyst from its Connecticut headquarters to London in order to build a relationship between the two offices, but every other hire will be from Europe. Marshman said that decision was made in order to have a staff that knows the local markets well. "There are different players involved, different rolodexes, different lists of companies and borrowers, so local knowledge is crucial," he said. He would not specify how many individuals he is looking to hire, but said the firm will be immediately looking to fill positions.
The firm has chosen Bear Stearns for its initial transaction, but is not currently in the market with a fund. Marshman said he realistically does not anticipate a transaction happening until 2007. "We have a very solid relationship with Bear and have had a lot of success with them on the U.S. CLO side," he said. "We are going to work closely with them to figure out exactly what the collateral mix will look like, but that hasn't happened yet." To date, Bear Stearns has done $1.6 billion in deals for Aladdin.
Marshman said the firm has not decided whether the funds will consist solely of European loans or a mixture of European and U.S. credits. He anticipates setting up a mix of funds, similar to what it has in the States, including a loan fund, similar to the Aladdin Floating Rate Fund.
Allan spent five years at NIB as the head of acquisitions finance before joining Aladdin. He previously worked at the Royal Bank of Scotland for 15 years. Aladdin currently manages $3.1 billion in the U.S. leveraged loan market across eight CLOs, a floating rate fund, a portable alpha bank loan account and a separate account.
