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Derivatives

CypressTree Launches London Venture

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CypressTree Investment Management, a Boston-based loan and high-yield bond manager with USD2 billion under management, is launching an outpost in London to increase its euro and sterling-denominated investments.

CypressTree Investment Management, a Boston-based loan and high-yield bond manager with USD2 billion under management, is launching an outpost in London to increase its euro and sterling-denominated investments. It has hired Jim Kean, a former head of fixed-income research at Barclays Bank in London, to lead to business. In addition, the company is gearing up to manage its first synthetic collateralized debt obligation, a single-tranche high-yield offering arranged with Calyon.

Gerald Brant, v.p. in client services and marketing at CpyressTree in Boston, said the new London venture has been set up to capitalize on attractive spreads of non-U.S. dollar assets, including leveraged loans. "We want to diversify our holdings for the benefit of investors," he noted. The group will start by opening its flagship USD500million leveraged loan fund, CypressTree Leveraged Alternative Income Fund, to euro-and sterling-denominated assets.

Kean has been brought on board to investigate adding sterling and euro notes to future structures, including cash and synthetic collateralized debt and loan obligations. In particular he will focus on credits in Germany and the U.K., as well as building relationships with dealers, Brant noted. Kean is on gardening leave and could not be reached for comment by press time.

The decision to add the credit derivatives structure CypressTree Synthetic CDO to the fold is also part of the group's expansion, Brant said. The deal is currently being pitched to institutional investors and private banks in Europe, Asia, Australia and the U.S. and offers exposure to a portfolio of 80, predominately high yield assets.

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