Credit Suisse First Boston's Leveraged Investments Group (LIG), a part of CSFB's Alternative Capital Division, is joining a slew of U.S. asset managers looking to capitalize on the European leveraged finance markets.
CSFB is setting up a London platform to manage leveraged loans, mezzanine debt and high-yield bonds with Glenn Clarke joining from AIB Capital Markets to head the effort. He will report to John Popp, managing director and global head of LIG. CSFB will be making further hires over the coming weeks to build the group.
The move times up with a hot market. Last week the triple-A notes on Harvest CLO III, a deal brought by Mizuho European Leveraged Finance Group, priced at LIBOR plus 25 basis points. This is tighter than any comparable CLO globally.
This month, Highland Capital Management completed its acquisition of ING Capital Management's European loan arm following Babson Capital Management's acquisition of Duke Street Capital Debt Management. Jack Yang, a partner at Highland, explained that leveraged buyout activity in Europe has been bigger than in the U.S. in the past three years. Spreads meanwhile have been wider (LMW, 4/11).
"Entering the European markets is a natural extension for CSFB's successful U.S. leveraged investments business," noted Linda Karn, a director in the LIG group. "While we are starting to see some reduction in pricing in Europe, there continues to be attractive investment opportunities in the European markets." CSFB's LIG manages leveraged loans and bonds through collateralized loan obligations and has assets under management of $5.9 billion.