Joyce DeLucca has left Katonah Capital, which she formed in 1999 with Kohlberg & Co., to form Kingsland Capital and now three Katonah analysts and principals, Brian Carlson, Tom Liu and Robert Perry have also resigned, loan sources said.
Sources familiar with the situation say DeLucca's departure was prompted by Kohlberg's attempts to sell Katonah's collateralized debt obligation management contracts to Allied Capital Corp.'s leveraged loan and bond management arm Callidus Capital Management.
Calls to Samuel Frieder and Christopher Lacovara, principals at Kohlberg and members of Katonah's management committee, were not returned. DeLucca, who was a managing principal and portfolio manager, did not respond to messages. Neither Rick Ivers, founder of Callidus, nor an Allied spokesman returned calls.
The departures could create a massive headache for both Kohlberg and Allied, as the key man provisions on some of Katonah's six CLOs have now been tripped, said sources. Kohlberg will now be unable to transfer these deals to any firm without the consent of the investors, sources familiar with the deals said.
If the investors did approve a change of manager, there is a strong possibility they would go with DeLucca, who has been managing these deals, sources noted. "The likelihood of Callidus being approved is close to zero," said another portfolio manager.