Mooted sale may herald start of CLO manager consolidation

By Mike Peterson

Friday, October 09, 2009

Market sources say that an owner's reported plans to its CLO management unit could be a first indication that the pace of CLO manager consolidation is picking up

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Comment by: Steven Park. Posted 14 years ago [2009-10-09 16:58:50]

I think most of the managers who set up shop with a pen/pencil and a calculator just to do CLOs will be likely candidates for consolidation..They will sell out soon (either by choice or forced by senior holders)..The managers who have more than 10+ deals will be the survivors I think..

Comment by: Douglas Watson. Posted 14 years ago [2009-10-09 15:12:38]

The long expected CLO manager consolidation will not gain any traction as long as the leveraged loan market trades in recent ranges. Even if a manager's junior/incentive fees are cut off, there's cause for hope in today's market and potential for some pay-off at the end of the movie which would never be recognized in a third party valuation of the manager's role. As long as a diminished staff can be paid and the rent bill is met, they will hang on. If all else fails, there are sub-management arrangements under which expenses can be eliminated but some ultimate residual value is retained.

Comment by: Anonymous. Posted 14 years ago [2009-10-09 15:00:19]

callidus boasts of a very strong credit team headed by Mavis Taintor. They have had a conservative investment style, which has shown up in their performance relative to the broad market. With Allied tight on liquidity and unable to fund callidus growth, the sale is probably a good thing for callidus which has built up considerable franchise value

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