Tennenbaum Capital Partners, an L.A.-based money manager that specializes in investing across the capital structure, has teamed up with Babson Capital Management for a new credit fund. The market-value CDO will invest in high-yield bonds and loans, mezzanine debt, public and private equities and may include distressed and non-performing instruments, according to Gary Witt, managing director of the structured finance group at Moody's Investors Service. The market-value fund is called Special Value Opportunities Fund and is being arranged by CDC-IXIS Capital Markets.
Babson will serve as co-manager in the selection and management of the investments. Howard Levkowitz, managing partner of Tennenbaum, declined comment and officials at Babson could not be reached by press time. CDC bankers did not return calls.
Two years ago Tennenbaum closed on an $885 million CDO that comprised distressed securities. The firm also manages two bond funds. Responding to how the manager will regularly update the marks on a mix of assets that can be illiquid, Witt explained that the manager has extensive guidelines and rules on how they get marks on the types of assets. He explained that the managers do their own marks and also use different providers.