Golden Tree sets up shop

Buyout firms could soon be on the receiving end of yet more liquidity from incoming US debt investors. Golden Tree Asset Management is the latest US-based investor in the process of moving into Europe with the establishment of a local office.

The new operation will be fronted by David Allen and Tim O’Shea, who are currently with Golden Tree in New York. The firm is planning to make additional hires in Europe going forward.

“The European high-yield market is picking up and coming into its own, and now seems like an opportune time to get in at a relatively early stage to gain a better understanding of issuers, trading patterns and market conventions,” said Frederick Haddad, a partner at Golden Tree in New York. “While there is no free lunch in the European market, we believe there are incremental opportunities there.”

Oak Tree Capital is also expanding in Europe, while Highland Capital Management has just purchased European CLO manager ING Capital.

The entry of US-based firms is driven by the growing maturity of the European leveraged loan and high-yield bond markets. Technical pressures due to an over-abundance of investors in the US loan market are also a factor.

“The US market is quite saturated, very well bid, and we have been deliberately under-invested recently. For those [investors that] can invest in European assets and multi-currency assets, a presence in Europe can be quite effective,” said Haddad.

Golden Tree has invested historically in European and UK distressed cable issuers.