A unit of insurance titan Prudential Financial has set up shop in London and will soon start investing in European secured debt for its inaugural European collateralized debt obligation. The unit, Pramerica Fixed Income, is the latest example of a U.S. manager flocking to Europe and bulking up staff to gain an entrance into the European CDO market.
As part of its efforts, Pramerica has hired Jonathan Butler, previously head of Dutch pension group NIB Capital's CDO group. He started last week as head portfolio manager at Pramerica's newly opened London office. And Michiel von Saher, v.p., and Fabrizio Marchesi, senior associate, have also joined from NIB as senior credit analysts.
Other U.S. managers to have set up shop in Europe in recent years include Babson Capital, through its acquisition of Duke Street Capital Debt Management; the Carlyle Group, which brought in the CLO team from Prudential M&G; as well as Alcentra and Greenwich Street Capital. In addition, U.S. hedge funds are becoming more active in the European loan market, with the likes of Highland Capital Management, GoldenTree Asset Management and Oak Hill all having opened offices in London this year.
Butler said Pramerica aims to have a staff of eight or nine in London, which will continue to leverage the expertise of the credit research, structuring and trading teams based in the U.S. Pramerica Investment Management, in Newark, N.J., manages about $2.6 billion in eight collateralized debt obligations and is the eighth largest CDO manager in the U.S., according to Standard & Poor's.