Structured credit specialist SCIO Capital has launched its second fund with a target of €100 million.
SCIO, which was founded in 2009 by Deutsche Bank veterans Greg Branch and Saul Greenberg, works with European banks, often on a bilateral basis, to dispose of non-core, capital-intensive structured credit assets to reduce the banks’ capital costs. SCIO advises its funds and accounts to invest in exposure to these tranches of credit, and also high returns offered by these securitised products.
The fund has initial commitments from European pension funds, the firm said in a statement. It is not using a placement agent.
SCIO Fund 1, a €65 million vehicle, has returned 14.1 percent this year to date, based on performance data from June 2010 to October this year, the firm said in its latest weekly bulletin. Over that period it has outperformed the DAX and comparable indices for high yield, hedge funds and ABS.
The firm also manages capital for institutional investors on a segregated account basis. Together with Fund 1, it manages €210 million in total, a spokesman said.
Both Fund 1 and its managed accounts have delivered annualised returns of more than 20 percent since 2009, SCIO added.
SCIO’s chief investment officer Greg Branch said: “There are still significant opportunities within the European ABS sector as demonstrated by the recent success of Partners Fund I. SCIO has a focused and successful strategy. Such strategy also includes working with banks on a bilateral basis to reduce their balance sheets in a structured and discrete way. These strategies are in return for a yield premium over syndicated transactions. SCIO is one of only a handful of specialist investors with the experience to work on these complex bilateral transactions.”