The Blackstone Group is looking to build a group focused on launching collateralized loan obligations. Dean Criares, hired by the private firm last week to head up the effort, said he will be looking to hire four to five people this year to round out the team. Criares said he has not hired anyone yet, but remarked, "I have new resumes in front of me." He said he will first focus on finding talent with an industry/credit focus and then he will look to hire someone in a trading capacity. Criares said the firm is building the team with plans of raising a series of vehicles, but he declined any specific comment on the size of the products or a timeframe for launch.
Criares, a 15-year veteran of CIBC World Markets, was previously the senior debt portfolio manager for structured vehicles for CIBC managed by Trimaran Advisors. He will now report to Howard Gellis, senior managing director in mezzanine finance at Blackstone. "There's modest risk with loans and we found the right person in an economic environment that's appropriate for loans," said Gellis of the firm's decision to hire Criares and launch into the asset class.
Gellis added that Blackstone has been considering entering the CDO business for the last few years, evaluating CBOs and CLOs and both market value and cash-flow structures. In explaining the firm's decision to go with cash flow CDOs, he asked, "What's a flexible, workable strategy for managing a bond product that doesn't blow up when the bond market goes bad? Until they come up with that, I'm staying away from it."