Société Générale Relaunches U.S. Leveraged Finance Biz
Société Générale is ramping up a leveraged loan effort in the U.S. after more than a four-year absence and is looking to assemble a team of about 10 in the next two or three months.
Société Générale is ramping up a leveraged loan effort in the U.S. after more than a four-year absence and is looking to assemble a team of about 10 in the next two or three months. One of those hires is expected to be an established managing director from the U.S. leveraged loan market, according to Rene de Laigue, global head of leveraged finance.
The bank is looking to build a franchise in the middle market, focusing on the private equity relationships the European business has developed. Guillaume Dovillers, director in leveraged finance, was brought over from London to lead the effort. He had been working in the U.K. and helped launch the business in the Italian markets. Additionally, Marco Shunder, v.p., was brought over from Germany.
The new push is the second go around for the bank. Sociéte Générale had been involved in the U.S. for several years, but between 1998-2000 the business model was not as client-driven as the bank would have liked, de Laigue explained. As the economic cycle played out, there were some client exposures that did not turn out well and in 2000, management turned its focus to rebuilding the European business. de Laigue, who had spearheaded the European effort between 1990-98, went back to London in 2001 and the U.S. office was shut down. At the closing it had a portfolio of about $700 million of exposure, which it has brought down to zero.
de Laigue explained the bank hopes to draw upon its strength in the European leveraged lending market, where they rank in the top three for leveraged finance arrangers in Europe, for Jan.-May 2005, according to EuroWeek. "We have a leading leveraged finance practice in Europe, which we plan to combine with a very strong product and industry capabilities in New York," he said. Building on the bank's European relationships will be a key aspect of building the U.S. franchise, he said. Of the dozen or so key relationships Société Générale has in Europe, about half are U.S. firms. "I think there will be a lot of interaction [between the European and U.S. desks], because the world is becoming smaller," he said. "The markets in the U.S. and Europe are no longer separate, there has been an influx of the U.S. investor base into Europe." de Laigue said there was not a right or wrong time to reenter the market, but said the decision was based on the strides the group had made in Europe.
The group served as a managing agent on its first deal in November. The financing backed the $942 million acquisition of SS&C by The Carlyle Group. The deal consisted of a $75 million revolver; $200 million term loan "B" and a $75 million Canadian tranche. Société Générale participated in the senior secured facilities only. Dovillers said the group participated because of a relationship the bank has with Carlyle. It has looked at other deals, but has not participated in another yet.