Katonah Capital has replaced the portfolio managers for Katonah II, Katonah III, Katonah IV and Katonah V after receiving the necessary approvals from the funds' shareholders and noteholders, according to a statement from the manager. Katonah has also obtained the necessary approvals for its proposals to replace the portfolio managers for Katonah I and Katonah VI and expects to implement those proposals in the near future. Sankaty Advisors will take over the second, third and fourth deal. INVESCO Senior Secured Management has become the replacement for the fifth. Katonah expects to enter into a sub-advisory with Blackstone Debt Advisors for the first and sixth deals.
Katonah was forced to find replacements following the departure of Joyce DeLucca to form Kingsland Capital, which triggered the key man provision in most of the funds. She left ahead of the firm being sold to Allied Capital, taking a significant portion of the staff with her (LMW, 2/7). There were some rumblings last week that Kohlberg was skirting the collateral management agreements by delegating collateral management responsibilities to the replacements.