Cairn Capital Takes Over $1.2 Billion Sailfish CDO (Update1)
Story date: 2008.4.17
Cairn Capital, a London-based asset manager, has taken over running a $1.2 billion collateralized debt obligation as Sailfish Capital Partners LLC winds down because of redemptions from its main hedge fund.
Cairn, which oversees $10 billion of assets, will manage the White Marlin CDO, which Stamford, Connecticut-based Sailfish set up in 2007 to invest in investment-grade corporate debt, according to an e-mailed statement from Cairn today.
Cairn is among a handful of money managers that are scooping up business by taking on credit funds from competitors that are scaling back or closing because of contagion from subprime losses. Pacific Investment Management Co., manager of the world`s biggest bond fund, is overseeing $36 billion of assets from WestLB AG`s structured investment vehicles and commercial paper conduits.
``You`re going to see a lot more consolidation in this sector," said Tim Frost, a director at Cairn Capital in London. ``As managers fall by the wayside or deals wobble you`ll see stakeholders looking for stable managers to step in and take on their responsibilities.
Cairn was appointed earlier this month to advise on reorganizing the collapsed 498 million-euro ($786 million) Coltrane collateralized loan obligation set up by Deerfield Capital Management LLC in Rosemont, Illinois. Investors appointed receivers at KPMG after losses on its holdings of debt used for leveraged buyouts.
Winding Down
Sailfish is winding down its funds in an ``orderly fashion" and closing its CDO management business, Mitch Ackles, a spokesman for Sailfish in Coral Gables, Florida, said today in a phone interview.
CDOs group assets such as bonds, loans and credit-default swaps and use the income to provide a return for investors.
Babson Capital Management LLC, a unit of Massachusetts Mutual Life Insurance Co., in February took over the management of a $300 million CDO called Osprey set up by WestLB`s Brightwater Capital Management.
BlackRock Inc. was appointed last year to manage Florida`s Local Government Investment Pool on an interim basis after it was frozen. The fund was the largest of its kind before a run by investors concerned that it would lose money on subprime-related securities.
Credit to Creditflux - Neil Unmack
