Duke Street Capital Debt Mgt Announces The Close Of Its €450m Third Leveraged Loan CDO Fund
London -- 08/02/2004 --
Duke Street Capital Debt Management Limited (DSCDM), one of the largest European leveraged loan CDO fund managers, today announced the successful close of Duchess III, its third collateralized debt obligation (CDO) fund.
The fund is DSCDM's first raised under the new ownership of Babson Capital Management LLC (Babson Capital), an investment management firm based in Cambridge and Springfield, Mass., which acquired the business from Duke Street Capital group in May 2004.
The $450m fund focuses on senior secured and mezzanine loans within the leveraged finance market. Assets are highly diversified by industry, geography and asset type, with a target mix of 80% senior secured and 20% mezzanine loans. All assets are rated by both Standard & Poor's and Moody's. With Duchess III, DSCDM now has total funds under management of $2bn.
Roger Crandall, Head of Corporate Securities at Babson Capital, commented, "Our intention is to build on DSCDM's commanding presence in the European leveraged loan market. We believe European leveraged loans and mezzanine investments offer good value for investors."
Ian Hazelton, Chief Executive of DSCDM commented, "Duchess III is already over 65% invested in senior and mezzanine assets. The European leveraged loan market remains robust with low default characteristics and attractive pricing. The current high levels of liquidity in the private equity sector underpin continued growth in the supply of loans and we look forward to further participation for the benefit of investors in all of our funds."
This third DSCDM fund has been sized to recognize the reinvestment appetite of DSCDM's existing funds and is structured with a broad mix of investment strips, each carrying various levels of return. The fund will also have access to a wider investment pool than many European CDOs as a result of a portfolio hedge that enables it to efficiently invest in both sterling- and euro-denominated assets.
DSCDM is one of the largest participants in the leveraged loan market with strong relationships with the major arranging banks. The senior management are long- standing participants in the industry, having themselves previously been deal arrangers. In addition, asset sourcing, analysis, investment and ongoing performance measurement are all handled internally by one of the largest and most experienced teams in the industry.
Since inception DSCDM has invested in excess of $2.9bn consisting of 158 separate assets selected according to stringent criteria from 366 opportunities.
CDC IXIS structured and arranged Duchess III and has been working alongside the Duke Street Capital Debt Management team in the placement of the notes.
About Babson Capital Management LLC
Babson Capital Management LLC and its subsidiaries serve institutional investors around the globe and have $128.9 billion in assets under management as of June 30, 2010. Through proprietary research and analysis and a focus on investment fundamentals, we develop products and strategies that leverage our broad array of expertise in fixed income, equities, alternative, structured products, debt financing for corporations and debt and equity financing for commercial real estate. Based in Boston and Springfield, Mass., and Charlotte, N.C., with offices in New York City and Los Angeles, the firm’s subsidiaries include Babson Capital Europe Limited in London, Babson Capital Australia Pty Ltd in Sydney, and Cornerstone Real Estate Advisers LLC in Hartford, Conn. Babson Capital is a member of the MassMutual Financial Group.
In May 2004 Babson Capital completed its acquisition of Duke Street Capital Debt Management ("DSCDM") from Duke Street Capital, an independent fund management group. DSCDM is Babson Capital's first subsidiary in Europe. DSCDM is authorized and regulated by the Financial Services Authority in the United Kingdom.