Duke Street Capital, a U.K.-based private equity firm, is reportedly looking to sell its leveraged loan asset management business, which currently has just under $2 billion in loans under management. David Wilmot, a director of Duke Street, did not return calls.
The business was founded in 2000 and has raised two collateralized loan obligations. The firm is raising its third CLO (LMW, 12/15). A CDO analyst explained to sell a CDO business, a firm should have at least three CDOs under management. "You need to build a franchise before selling," he said. Other CDO businesses that have recently been sold include Barclays Capital Asset Management's U.S. and European operations. Allied Capital bought Callidus Capital Management (11/24) and Octagon Credit Investors is currently being auctioned off by J.P. Morgan Partners. The analyst added that unless management changes, the impact on the notes is inconsequential. "What really matters is the skills of the people running the vehicle," he noted.