SMBC sets up €3 billion debt fund with Park Square Capital

Financial institutions are becoming asset management’s most interesting segment (see archive 2017-3-27 Asset management rides high on market gains anew money) and foreign loans are the investment increasingly attracting their attention. They are both setting up and investing in funds which lend directly to borrowers or buy existing facilities in the secondary market.

This makes sense since banks already know to do credit analysis but have little need to use their skills in Japan where demand is low and customers and their lenders know each other well through ties that have endured for decades.

Pension funds abroad are being are also attracted by the asset class which they see as protecting them some of the volatility they expect to see as a result of geo-political and societal risks.

Sumitomo Mitsui Banking Corp missed out on acquiring GE Capital’s Ares Management when it bought the firm’s European Sponsor Finance business in 2015 and has been looking since then to create a similar entity.

Last month it set up with the London-headquartered Park Square Capital a joint venture vehicle, for which fund raising of €3 billion is expected to close shortly, that will provide unitranche loans to European middle-market companies.

The venture will be headed by Howard Sharp, Park Square’s head of mid-market direct lending and Owen Verrier-Jones, SMBC’s head of sponsor coverage and origination, who both joined their respective firms from GE Capital in 2015.

Park Square was founded in 2004 by former Goldman Sachs executives and is backed by Ontario Teacher’s Pension Plan and the Caisse des Dépots et Placement du Quebec.

© 2017 Japan Pensions Industry Database/Jo McBride. Reporting on, and analysis of, the secretive business of Japanese institutional investment takes big commitments of money and time. This blog is one of the products of such commitment. It may nonetheless be reproduced or used as a source without charge so long as (but only so long as) the use is credited to www.ijapicap.com and a link provided to the original text on that site.

This blog would not exist without the help and humour of Diane Stormont, 1959-2012

 

 

 

 

 

 

 

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