BAREP Asset Management, a e8 billion alternative management subsidiary of SG Corporate & Investment Banking, is planning to launch a leveraged loan fund this spring. The fund is BAREP AM's first entry into the European leveraged loan market.
According to Derivatives Week, a CIN sister publication, Axel Cabrol, the fund's manager in Paris, said the fund will invest primarily in leveraged loans, but also in bonds, credit-default swaps and loan-only credit default swaps. It will use CDS for capital structure arbitrage and long/short trading strategies. He declined to name the counterparties BAREP will work with or comment on the criteria for choosing them.
The fund has a target size of e200 million. JPMorgan is the prime broker. Cabrol said it is looking to enter the loan market because it sees loans as a less volatile asset class than high-yield bonds and one that is less likely to deteriorate in the near term.
BAREP AM's 30-person fund management team in Paris will have five specialists focused on the loan fund.