CIFC has hired Jordan Teramo, formerly of Anandar Capital, to build out its high-yield bond business, Private Debt Investor has learned.
Prior to his post as president and co-founder at Anandar, Teramo previously worked in management at Magnetar Capital and Brigade Capital.
The hire comes as CIFC eyes specific advantages of the high-yield bond market, said the firm’s co-chief executive, Oliver Wriedt.
“We don’t see a lot of value in the broader high-yield bond market, but have identified a number of compelling event-driven opportunities,” said Wriedt.
Wriedt noted that there are opportunities to invest in bonds with coupons as low as 5 percent that have the potential for a high-single-digit or low-double-digit internal rate of return.
This push also coincides with the firm’s heightened activity in the collateralised loan obligation space following the closing of its acquisition recently by Centricus.
So far this year, CIFC has priced multiple CLOs: a $800 million deal with Deutsche Bank in February, a $575 million transaction with Morgan Stanley in March, and a third for $725 million deal with Citigroup in June. It also did a $500 million deal with BNP Paribas in December.
With the US risk retention rules now in effect, CIFC is comfortable using its balance sheet capital as the rules require, Wriedt said.
The firm has used the capitalised majority-owned affiliate hybrid structure to meet the risk retention guidelines. Wriedt added that this route is fairly atypical in the CLO market which has seen more collateralized mortgage obligations and capitalized manager vehicles.
The New York-based firm is also exploring investment opportunities in Europe, looking at structured credit, leveraged loans and high-yield bonds. Though Wriedt said the ramp up time for CLOs in Europe is far longer than in the US, he is not ruling out building a new issue business when “the time is right”.