Two out of the three collateralized debt obligations that were held by Cigna Investment Management have been transferred to Hartford Investment Management with the third being transferred to Prudential Investments. Cigna's bank loan team, headed by Mike Bacevich, went over to Hartford last March (LMW, 3/26), but the investors in the CDOs had the right to decide whether the assets of approximately $1 billion across the three structured vehicles, would move over with them, explained Andrew Kohnke, a managing director with Hartford.
As first reported on LMW's Web site last week, Kohnke said it was always hoped the CDOs would move over with the team, but it was not assured, as the equity investors in the vehicles held the cards. The Times Square SERVES 2001-1 deal and the Trumbull Rated Loan Fund 2003-1 were the two deals transferred to Hartford, totaling approximately $700 million. The third deal, also a Times Square SERVES CLO, was controlled by Prudential, said Kohnke. He declined further comment on why Prudential held the controlling debt.
One source speculated that the reason lay in Prudential's recent acquisition of Cigna's benefit retirement business. This transferred over $50 billion in assets under management to Prudential last month when the deal closed. Ross Smead, portfolio manager for Prudential's leveraged bank loan division, declined comment. A Cigna spokesman did not return calls.
Kohnke said Hartford would still be looking to expand the assets through additional CDOs and potentially mutual funds going forward. The rest of the Hartford bank loan team comprises Cliff Abramsky, Mike Ashton, John Connor and Frank Ossino.