CQS sets up distressed debt team

Former Apollo managing director Simon Finn is in the early stages of establishing a team.

Alternative asset manager CQS has hired Simon Finn to lead a team targeting distressed investment opportunities arising from bank deleveraging in Western Europe.

Finn was previously a senior investment team member in the European principal finance group at credit specialist Apollo Global Management. The Apollo European Principal Finance Fund II, which closed on €2.5 billion in 2012, was raised to buy loans from European lenders to residential, commercial, consumer and corporate assets that are in stressed or distressed financial situations.

Finn who joined Apollo in 2008 but left a year ago, as reported by Pension & Investments, is in the early stage of building a European principal investments team for CQS, an industry source said. CQS has also hired a couple of other people from different firms for the new strategy, PDI understands.

The Finn-led team will focus on acquiring non-core, stressed and distressed loans in the private debt markets which are being sold by financial institutions across Western Europe as part of balance sheet deleveraging, the source said.

Michael Rummel, a spokesman for CQS, confirmed Finn’s appointment but declined to comment any further.

European banks have an estimated €2.4 trillion in ‘unwanted loans’, or loans considered both performing and non-performing yet non-core, according to research from financial services firm PricewaterhouseCooper.

Bank health tests including the Asset Quality Review by the European Central Bank, the results of which are due to be released by the end of October, are expected to accelerate deleveraging. A mid-year review from PwC in July this year said that banks are set to offload more than €83 billion in non-core loans in 2014, exceeding the €63 billion sold in 2013.

Founded in 1999 by chief executive and senior investment officer Michael Hintze (pictured), who started his finance career at the famed bond-trading bank Salomon Brothers, CQS follows a multi-strategy asset management approach. 

It launched its first hedge fund in March 2000 and has since expanded its offering to include convertibles, asset backed securities, credit, loans and equities, according to its website. The group has offices in London, Hong Kong, New York, Jersey and Sydney.