Lenders: Heller to Try Euro Middle Market –

To absorb a rapidly growing leveraged finance market in Europe, Heller Financial, said that it is forming a London-based operation that will concentrate on underwriting senior secured loans for the middle-market in the U.K. and continental Europe.

Although the move is by no means Heller’s debut in Europe, the newly established European Leveraged Finance Group is the non-bank lender’s first leveraged finance operation outside the U.S. [Heller currently has 14 other subsidiaries and joint venture partners working mostly on trade financing and asset financing in Europe.]

Initially, the group will be a four-person team headed by Graham Randell, who will serve as the senior managing director.

All four members of the team previously worked in NatWest. Randell was the managing director and head of acquisition in the bank between 1994 and 1999 and led a team that completed more than 500 transactions representing GBP10 billion.

Randell said Royal Bank of Scotland’s recent acquisition of NatWest is one reason of the bankers’ exodus to Heller. But Heller’s commitment to build a strong leverage finance team at a time when U.S. investors are pouring money into a growing European leverage finance market also seemed to be an attractive opportunity for him.

Currently, the bulk of transactions is in the U.K. “If you look at the European market, 50% of the leverage lending is U.K. money,” Randell said. But continental Europe is growing faster than ever in this area, too.

The Leveraged Finance Group will move into its London office space in April.