London Hedge Fund Firm Targets Loans, Structured Products

Ilex Asset Management, the London-based credit hedge fund firm, plans to jump on opportunities in leveraged loans and structured products as it seeks to boost assets under management.

  • 03 Nov 2006
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Ilex Asset Management, the London-based credit hedge fund firm, plans to jump on opportunities in leveraged loans and structured products as it seeks to boost assets under management. "The two-year plan is to grow the firm ten-fold, to $1.5 billion," Ilex founder and CIO Simon Thorp told Alternative Investment News, a CIN sister publication.

The firm will launch its second hedge fund in January, focused on European leveraged loans. "We'll get the leveraged loan fund up and running and then gradually put together about half a dozen strategies within leveraged finance and credit," said Thorp. These could include a portable alpha strategy, a fund focused on emerging economies and a fund with a global macro view of the credit space, he suggested. Another option might be a long-only offering, he added.

On the structured product side, the firm is currently raising money for its first note, a 1.5x-leveraged version of a selection of the best ideas within the main credit fund. The firm aims to raise $100 million but it could grow larger, said Thorp.

Thorp estimated that only around six to 10 firms run a strategy focused on leveraged loans, but predicted that more players will move into the space. "Within fixed income, the fastest growing area--and therefore the most exciting area--is loans," said James Sclater, senior portfolio manager. Pricing remains crude and very different credits are given similar pricings, which points to an inefficient market rife with opportunities, he said. "[Loans are] a senior part of the capital structure; they're well-secured, so they're a more comfortable part of the structure to be in. Those qualities make them the perfect raw material with which to create structured products."

The leveraged loan fund is likely to launch with $30-50 million and has an initial target of $250 million. It will charge 2/20 fees with a six-month lock-up, and will have a E1 million investment minimum.

  • 03 Nov 2006

All International Bonds

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3 Bank of America Merrill Lynch 296,928.01 1015 7.27%
4 Barclays 249,873.33 927 6.12%
5 Goldman Sachs 220,211.32 736 5.39%

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1 BNP Paribas 46,112.22 182 6.98%
2 JPMorgan 44,545.29 93 6.74%
3 UniCredit 35,639.50 153 5.39%
4 Credit Agricole CIB 33,211.72 160 5.03%
5 SG Corporate & Investment Banking 32,419.80 126 4.91%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
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1 JPMorgan 13,792.73 61 8.96%
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3 Citi 9,716.40 55 6.31%
4 Morgan Stanley 8,471.86 53 5.50%
5 UBS 8,248.12 34 5.36%