ft.com Subscription required ‘… Watch now for the well-established boutiques, management-owned and operated, managing a fraction of the trillions of the behemoths. They are big enough to clear all regulatory and technology hurdles, immersed in their field of choice, differentiated by their willingness to constrain their capacity, focused on asset management and not asset gathering, and comfortable with aligned fee structures. The scales are tipping — some colossi will survive but the smarter money will flow elsewhere.’
SCI.com Subscription required Ever loosening loan documentation and manager drift are giving CLO investors pause for thought, particularly those higher in the structure. While certain managers may be benefiting now, there are worries that those pursuing a less conservative strategy may fall short when the credit cycle turns.
Creditflux Subscription required London-based SCIO Capital has largely reorientated itself in its belief that private credit (which includes direct lending and other private financings) provides sufficient downside protection to weather any potential storms that may affect the credit market over the next few years. © Creditflux
Creditflux Subscription required SCIO Capital’s Partners Fund I is in its planned final realization of asset values, five years after the launch of the closed-ended fund. The fund, which invested in core European private structured credit on behalf of institutional and other professional investors, returned 11.5% pa net of fees over its lifetime. A majority of SCIO Partners Fund I investors have chosen to transfer their realization proceeds to the SCIO Opportunity Fund I. © Creditflux
KPMG: SFIG Vegas – the full round-up CLO equity investors at SFIG Vegas were in an upbeat mood in a panel discussion, but with rate rises and political risks looming they said this was no time to get comfortable Greg Branch, CIO at SCIO Capital, pointed out that interest rate shocks have historically been a problem for low-rated companies in the US, but in European credit markets, a bigger concern was political risk. ‘Europe is more constructive in terms of baseline forward default rates compared to the US, but you have a tail risk in Europe that you don’t have in the US. A populist government coming to power in France or Italy would be a much larger shock’.
ft.com Subscription required Greg Branch, an investor at SCIO Capital, an asset manager, insists there are significant differences from the first effort in the 1990s. ‘You need to stress a lot of different variables — the nice thing about it is there are benefits compared to earlier deals,’ he says.