Barclays Bank has sold the management of its Venture CDO 2002 and Venture II CDO 2002 loan funds to MJX Asset Management, as first reported Wednesday on LMW's Web site. The newly formed company is owned by Robert Sillerman and members of the existing Venture management team, including Hans Christensen and Martin Davey. Michael Regan is also moving with Christensen and Davey. The team was together at Citigroup's alternative investment strategies unit, before joining Barclays in 2001 (LMW, 8/01).
"Sillerman has been an investor with Hans for a number of years, including when he was at Citigroup," said a source. "When [MJX was] given the opportunity to partner with him rather than [just] invest with him," Sillerman took it, he added. MJX will look to sponsor new funds, potentially including hybrids of these [CDO] structures, the source said, noting MJX plans to seek third-party investors. "MJX plans to sponsor a new CDO vehicle in the near term," he stated, but he added that the firm has not yet formally engaged a placement agent. "Hans' specialty is leveraged loans," he added, noting that the funds will continue to be loan-based. Credit Suisse First Boston led the two Venture CDOs. An MJX official declined comment.
A Barclays spokesman explained why the management is being sold off. "The asset management CDO business has few synergies with the rest of Barclays Capital businesses." The two Venture deals invest predominantly in high-yield loans and though Barclays is involved in high-yield activity, this does not provide synergies, he said. He reiterated that the sale was not motivated by FIN 46, a Financial Accounting Standards Board (FASB) measure that calls for the consolidation of special purpose vehicles on the balance sheet of the firm or bank taking on most of the vehicle's risk. This is said to be causing a number of banks to evaluate strategic options regarding CDO businesses. J.P. Morgan is said to be considering the sale of Octagon Credit Investors (8/31).