Highland Capital Management is looking to invest in leveraged finance assets in Europe and plans to launch a collateralized loan obligation or a multi-strategy fund including high-yield bonds this year, according to Jack Yang, partner in New York. The firm also plans to expand its team in London, currently three-strong, by making new hires and relocating staff from New York or Dallas. Yang did not specify targets for the size of the investment team or assets under management, but indicated Highland Capital is intent on ramping up the business quickly.
"Leveraged buyout activity has been bigger in Europe than in the U.S. for the past three years and spreads on leveraged loans have been wider in Europe since 2002," observed Yang, on the attractive of the European market. Moreover, the institutional investor base in Europe has matured, said Yang, with non-bank investors picking up more than 25% of leveraged loan transactions.
Capital has over $14 billion in alternative investments including more than $1 billion in high-yield bonds alongside senior secured loans, mezzanine debt and structured products. Highland runs 12 CLOs in the U.S. and recently took over management of two European CLOs as part of its acquisition of London-based ING Capital Management. Stephen Williams, Herman Guelovani and John McAuliffe, previously with ING, will continue to manage the Copernicus I and II vehicles Highland is taking over.
