Pramerica launches European CLO business

The fixed income asset manager of US-listed Prudential Financial has hired a European team to expand its leveraged finance business.

Pramerica Fixed Income, the public fixed income asset manager of US global insurer and asset manager Prudential Financial Inc, has set up a new European collateralised loan obligations (CLO) business.

Combining this local team’s European expertise with our approach to investing and credit research will… help to establish us as long-term participants in this rapidly growing market.

Jim Sullivan, senior managing director, Pramerica Fixed Income

The firm has set up a new London-based team to manage CLOs in Europe and to introduce money from existing investors to the European leveraged loan market.

Jonathan Butler, who joins Pramerica as a principal and portfolio manager from NIB Capital, will head up the new team. Butler was the former head of NIB’s CLO team.

Also joining from NIB are senior credit analysts Michiel von Saher, who comes on board as vice president and Fabrizio Marchesi, senior associate. Both will focus on European leveraged loans according to a statement from the firm.

Jim Sullivan, senior managing director of Pramerica Fixed Income said in the statement: “Combining this local team’s European expertise with our approach to investing and credit research will… help to establish us as long-term participants in this rapidly growing market.”

Pramerica Investment Management, another division of Prudential Financial, operates the firm’s US collateralised debt obligation (CDO) division, which has around $2.6 billion (€2.1 billion) of assets under management through eight Dryden-branded CDOs.

According to rating agency Standard & Poor’s, Pramerica Investment Management was the eighth largest manager of CDOs in the US as at December 31, 2004.

Competition in the European CLO market is heating up. In April, Washington-headquartered The Carlyle Group closed its first European CLO fund on €450 million, headed up by managing director Mike Ramsay.

Also in April, Babson Capital Europe, formerly Duke Street Capital Debt Management, announced the pricing for Duchess IV, its fourth CLO vehicle, on €525 million, ahead of a €400 million target.