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