Arini burst onto the European CLO scene with its debut deal in November 2023 and followed it up with a second in March, obtaining remarkable pricing for a fledgling manager. The firm has garnered lots of attention since it was founded in 2022, with former BNP Paribas trader Mehdi Kashani leading the CLO platform as head of structured credit. GlobalCapital’s Tom Lemmon talks to the newest kid on the CLO block.
When did Arini begin building its CLO platform and how has that process gone?
I’d started [at Arini] in August 2022, and the original Arini team always had in mind to be involved in the CLO market. We kicked off the project when I joined, detailing the business plan, how we [were] going to approach the market and making sure we did it in the right way. That was always really a core part of what we wanted to achieve.
We wanted to show the market that we’re not just turning up [but that we] wanted to be a key contributor to CLOs in a consistent way over the long term. We wanted to demonstrate very early on that this was our intention.
We were thinking about the types of people we wanted to hire, the size of the team, the equity capital commitment, the systems, the infrastructure, how we approach and engage with investors and how we would create liquidity.
This happened between August 2022 and when we first went out to arrangers to tell them about our story. For us, it was really important that the arrangers we partnered with really understood our approach so they could be the best possible ambassadors in the market. From then on, it’s been all systems go.
In your own words, what is the Arini story?
The core of everything we do is fundamental credit underwriting: that’s the IP of the firm as a whole, and in CLOs we’re using all of that. We’re using the IP that our analysts generate to make good credit selections, to create solid portfolios, and to manage CLOs in an optimal way.
A CLO for us is a way to express our views on leveraged loans. We’re not using it to have aggressive structures or to opportunistically do anything. We’re going for consistency, which is why we have debt friendly documentation for our deals. We want to have the most liquid platform possible, to incorporate as many investors as possible.
I think it’s the combination of those two things that has so far been successful in drawing people to the platform.
Since inception, Arini has attracted a lot of attention from the media and onlookers in the market. Do you feel that there’s extra pressure on you and your team because of this?
I think our founder Hamza Lemssouguer has built an excellent platform. He’s created something quite incredible, which requires a lot of intensity. And I think he’s hired people into the firm who understand that.
We have our approach and we know what we want to achieve, so now we’re focused entirely on executing it and staying true to the course. We adjust as we see new information coming in, but we try not to let what’s going on around us distract us from that.
You’ve been to Barcelona for Global ABS so many times. Why is it so important to be there every year?
First and foremost, it’s a people business, which is the case across finance, but even more so in CLOs and securitized markets. There’s so much complexity that there needs to be professional trust and personal trust when you’re working with people. We’re all colleagues at the end of the day.
If we sat behind the screen and did our jobs and didn’t really know each other for 365 days of the year, I think you would lose that interpersonal level of trust that you need in a product that’s highly complicated. I think having this conference every year is just a way for everyone to regroup, catch up and connect again with people you maybe haven’t spoken to for a long while. It’s really important for the industry.
There are so many conferences, but this one is the one that people block out in their calendar.
And finally, what’s the best party at the conference?
It changes over the years, but BNP Paribas is the party that everyone gravitates towards by the end of the evening. It’s the best because everybody’s there and they’re all together.
I’m usually looking out onto the sea thinking last year I swore that I would book the weekend before as a holiday, but I never end up doing it!