Blackstone has become the latest US group to establish a beachhead in the European debt market with the announcement that the US alternative asset giant has appointed Debra Anderson as a managing director. Anderson will lead the group’s push into non-investment grade assets issued by European companies.
She will join Blackstone’s corporate debt group, which was established in 1998 and has grown to nearly US$5bn in commitments and assets under management.
Seperately, Blackstone announced the recruitment of Brett Wyard from Los Angeles-based distressed debt specialist Oaktree Capital Management to join Carlyle Strategic Partners, its distressed securities arm.
While the move into debt management represents a well-trodden path for US buyout groups, European firms have traditionally shied away from using their brand, market knowledge and fundraising clout to diversify into related areas of the asset class. US groups such as Carlyle and KKR have long operated debt businesses, while other debt investors such as Cerberus and Apollo have been able to make the transition into equities.
Although many European groups will structure mezzanine into their transactions on an informal basis, few have made any official moves. Duke Street was the major exception before it sold its debt management business to Babson Capital in 2004. CVC is thought to have had a negative response when it recently proposed the idea to its investors.
Commenting on this apparent discrepancy between US and European groups, Dominic Ely at Investec said: “There are cultural differences, the US groups see themselves as global, multi-service asset managers, while the European firms are less institutionalised.”
Howard Gellis, head of Blackstone’s corporate debt group, said: “Based on Blackstone’s private equity and real estate businesses in Europe, and our own assessment of the growing institutionalisation of the European debt market, we’ve been preparing to enter that market for years.
“The key for us was finding the absolute best candidate to represent Blackstone, a leader that can build a business with scale. Debra’s credit-based approach towards investing is in line with the way we run all our investment activities and her reputation and support within the market is outstanding.”
Anderson has been active in the European leveraged loan market for the past 12 years. Latterly, she was the leveraged loan portfolio manager for Intermediate Capital Group PLC, a UK-based mezzanine specialist, where she was responsible for four European CDOs totalling €1.4bn in loan assets. Prior to that, she established and ran an acquisition finance lending business for a major European bank.
Blackstone’s corporate debt group currently manages five CDOs, with approximately US$3bn of assets and a mezzanine fund that is currently investing in excess of US$1bn of commitments.