Hillmark Capital Management is prepping its second collateralized loan obligation with the expectation of pricing it in the first quarter of 2007. It is also working on a "conventional" credit opportunities fund that will focus on bank debt, bonds and special situations. Mark Gold, ceo, declined comment about any potential portfolios.
The CLO, Stoney Lane I, is expected to be a $500 million portfolio led by JPMorgan. The firm is currently in the warehousing phase and one source said it already has about half of the collateral warehoused. It will be looking to do a third portfolio of similar size next year, but it is still under consideration. It closed its first fund, Hillmark Funding, a $500 million portfolio also led by JPMorgan, a few weeks ago (CIN, 9/15).
The credit opportunities fund is expected to start off at about $100 million based upon market conditions and grow from there. It has not been named yet. Hillmark will again be working with JPMorgan. This fund is expected to also launch sometime in the first quarter.
Hillmark is also looking at the synthetic space, specifically the credit default swap marketplace, deciding how it wants to participate. "We are studying the synthetic marketplace looking at appropriate structures and how to enter that marketplace, which we expect to move into it in about a year from now," Gold said.
Gold, formerly of Trust Company of the West, and Hillel Weinberger, formerly of Loews Corp., formed Hillmark last March (2/10). Gold, Weinberger and Kevin Cuskley, senior portfolio manager and partner, manage the funds. Jack Chen, a Moody's Investors Service alumnus, is the chief operating officer. The 15-member team includes analysts from Goldman Sachs, Toronto Dominion, Credit Suisse and McKinsey & Co., among others (9/15). Gold said the firm is looking to add about two more senior analysts sometime in the first quarter.