CDIB Capital adds former Carlyle trio to new credit group

The firm, known for its private equity investments, is now entering into speciality finance through its newly built structured credit team.

CDIB Capital has hired three senior professionals to shape its new private credit and mid-market lending business.

The mid-market private equity investment firm has brought in Tor Trivers as head of the structured credit group. He has joined with two of his former investment colleagues from The Carlyle Group: June Yub Chen and Kyu Jung Sim, who have joined as senior vice presidents. The trio managed the Carlyle Asia Structured Credit Fund, also known as Carlyle Asia Structured Credit Opportunity Fund (CASCO).

It is understood that the Asia opportunistic credit fund has been fully liquidated and that final distributions to LPs have been made. The fund’s final close amount was $440.6 million, as per a regulatory filing.

Lionel de Saint-Exupéry, CDIB Capital’s director and co-chief executive officer, told Private Debt Investor: “The idea was to diversify our scope of investment strategy… by entering the private debt market where we can generate for us and our investors high-yielding contractual cash returns with downside protection complementary to our private equity business.”

The firm mainly invests in mid-market private equity in Greater China, the firm’s public disclosures showed, and particularly in the technology and biomedical sectors.

According to Trivers, CDIB Capital’s structured credit group will work on private financing and securitisation transactions and providing solutions that have security packages. The structured credit group will make US dollar-denominated loans of between $15 million and $50 million and target a baseline gross return of 9-14 percent. Transaction formats include loans, bonds, securitisations and preferred equities. In select cases, stapled equity investments will be made for incremental yield.

In the speciality finance business, the credit team will mainly focus on collateral such as loans and receivables. In other situations, collateral can be real estate-related, properties, receivables, equipment, and control of collection accounts. The scope of the speciality finance business includes personal finance, loans to small- and medium-sized enterprises, and auto-finance. “We like structural subordination [with] first-loss protection,” Trivers said.

The firm’s structured credit strategy runs encompasses investments in Australia, Indonesia, India, Greater China, and South Korea.

As both de Saint-Exupéry and Trivers noted, the opportunity set in the mid-market – companies with annual revenues of $50 million to $1 billion – is compelling in Asia as sectors of the market are underserved by the traditional banking sector.

“We see synergies with the rest of our group activities to further expand our coverage of the Asian markets,” de Saint-Exupéry noted.

He added in the statement on 29 April that the credit team had already closed its first transaction: a highly secured bond and stapled equity investment in a leading Korean consumer finance company.

CDIB Capital Group had more than NT$75 billion ($2.5 billion; €2.3 billion) in assets under management as of 31 March. With the formation of the structured credit group, CDIB Capital’s investments now span venture capital, growth private equity, leveraged buyouts, and private credit.

CDIB Capital Group is a subsidiary of China Development Financial Holding Corporation, a Taipei-headquartered financial group. CDIB Capital is also an affiliate of China Development Financial, a merchant banking group with around $100 billion in assets. CDIB Capital has offices in Hong Kong, Taipei, Shanghai, Seoul and New York.