News Analysis
ABS
Esoterics gather steam in APAC securitisation market
Demand for new asset classes could bring rapid expansion of securitisation in region
Traditional asset-backed securities in the Asia Pacific (APAC) region could become overshadowed by emerging asset classes and new players, as the demand for esoteric investments increases.
The securitisation market in the Asia Pacific (APAC) region is well stablished, particularly in countries such as China, Australia, South Korea, and Japan, where annual issuance reaches billions of dollars. With China and Australia leading the way, RMBS and auto ABS transactions dominate, though both have rather domestic-focused markets.
Nevertheless, the emergence of esoteric asset classes is beginning to gain traction, expanding securitisation into new territories, as Evan Lam, partner at Linklaters, explains. “We're starting to see new and emerging asset classes that could create a funding need/gap that would potentially lead to ABS taking off in a much bigger way in Asia,” he says.
Among these asset classes, data centres stand out as a significant trend that could introduce securitisation to new countries within the region, Lam says. According to Linklaters, the Asia Pacific data centre market is set to become the largest worldwide, with the potential to overtake North America by 2025, boasting a total worth of $60bn by 2027.
“The funding gap and funding need required to finance the construction and expansion of data centres is likely to be too large to be met by bank financing alone,” says Lam. “That's where we really see the need for public market financing to come in, and therefore a sector that's right for ABS.”
In Linklater’s latest report on securitisation in Asia, the company highlights the importance of the southeast Asian market, which is due to grow in the coming years. In this corner of the region, the report says, “growth is expected to eclipse that of the APAC region as a whole”. According to Linklaters, technological and regulatory developments in secondary APAC markets have led to significant growth in locations such as Mumbai, Johor, Batam, Kuala Lumpur, Bangkok, Ho Chi Minh City, and Manila.
This positive sentiment regarding the development of data centres across the APAC region is echoed by Ilya Serov, associate md at Moody’s. According to Serov, the securitisation capacity of Asian data centres is expected to grow by 20% year-on-year over the next few years.
“Globally, we expect data centre investment needs through 2028 to be in the order of US$560bn,” he says. “To a significant degree, this investment will need to be financed via ABS markets. Other esoteric asset classes are a little bit more sporadic.” Serov adds: “This is due to AI and because general technology trends are a secular trend. Other types of issuances I see as a little bit more opportunistic from time to time.”
More opportunities
In addition to data centres, Linklaters’ Lam anticipates that two other asset classes are poised for growth in the APAC region – specifically green financing and consumer receivables: “We’ve seen interest in the use of ABS to finance conversions of fleets to green vehicles – a form of auto ABS with an electric vehicle spin.”
Moody’s Serov foresees similar developments in green financing, highlighting transactions related to solar panels, battery financing and green home renovations. “We certainly see a higher percentage of portfolios being comprised of EVs, and we expect that to continue,” he says.
On consumer receivables, Lam notes there is a growing trend of using securitisation to finance microlenders and “buy now, pay later” (BNPL) providers. “We've seen an increase in private securitisations from fintech lenders who have run out of balance sheet capacity,” he says.
Nonetheless, for securitisation in APAC to expand into new areas, challenges such as regulatory fragmentation and investor hesitancy persist. As Lam explains: “It’s not a given that ABS will take off in Asia overnight, but the signs are there. For the emerging asset classes such as data centres, first movers just need to take the leap. Once someone does the first deal, it could open the door for further issuances.”
Marina Torres
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News Analysis
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US CRT: Shoring up regionals – video
Heliostat Capital founder and president Charles Callahan speaks to SCI
Charles Callahan, founder and president of Heliostat Capital, a New York risk advisory, speaks to SCI US editor Simon Boughey about loan exposures at US regional banks. He highlights that these might be worse than they look from the outside, how the reg cap market could be the answer, and what are the obstacles to greater regional bank participation.
News Analysis
Capital Relief Trades
Third-party validation
Can SRTs and ratings really combine?
As the SRT market further matures, shifts and broadens, will the use of credit ratings increase with it. Such interrogation may well be futile, with credit ratings reportedly growing alongside the wider SRT market expansion. However, being typically a first-loss market and investment, can this segment witness sustainable growth?
Naturally and conceptually, SRTs lend themselves very well to a debt rating. SRTs pay a regular coupon, are self-liquidating and are based on underlying asset classes that rating agencies have been rating for the best part of a few decades.
Describing the genesis of the involvement of credit rating agencies in the SRT space, Killian Walsh, md at KBRA, points to initial regulatory-led motivations. He says: Around five years ago, we saw banks beginning to engage with rating agencies as part of their efforts to facilitate capital relief. Under the ERBA framework, external credit ratings are used directly in the calculation of regulatory capital for securitisation exposures.”
He continues: “However, as the market consistently grows, inquiries have now become more investor-led.”
Expanding on such migration, Walsh particularly identifies US investors, capital solvency and market expectations as having played a decisive role. He notes:
“There was an expectation that the US SRT market would accelerate in anticipation of Basel III Endgame. In that context, US insurance investors in particular were preparing to deploy capital. That segment is especially accustomed to using ratings—for transparency, solvency treatment, or as a third-party opinion. As a result, we’re now seeing some existing participants looking to diversify and syndicate parts of their positions to US insurance capital. Another clear trend is the increased interest in obtaining direct ratings on CLNs”
He adds: “Additionally, in recent transactions being carried out in the US—which is still a relatively new and evolving market for SRT—we’re seeing that ratings are often included because the investor base is accustomed to using them. These deals also frequently involve full capital stack trades.”
An additional angle for growth concerns funds and structural optimisation. Fundamentally, part of the market growth has been prompted by funds increasingly turning to SRTs in a structured manner in order to access credit exposure. Within this shift, the emphasis on credit ratings is intensifying, either for mandate-driven eligibility purposes or to facilitate distribution.
Commenting on this backdrop, John Hogan a smd at KBRA says: “As funds increase their activity in SRTs—whether through feeder fund rated note structures, NAV-based leverage facilities, or by distributing a portion of the risk within a mezzanine tranche—they’re increasingly seeking to employ ratings.”
On the specificity of a rated feeder, one SRT investor notes: “We are very conscious of getting a rating early on in the life of a fund where you have to assume a certain composition of the fund investments. Because the point of view of a rated feeder is that it is just another LP in your fund, and you have other LPs who do not benefit from the leverage of the rated feeder. Therefore we need to be very careful not to prejudice the management of the fund towards the raising.”
Regarding the pros and cons of a rating in the context of SRTs, it appears evident that from a bank standpoint, a rating on the issuance of a (or multiple) mezzanine tranche can attract a broader crowd of mezzanine investors. Additionally, it could also be beneficial to get a rating on the senior tranche for capital reasons (if a bank is under the SEC-ERBA). However, what about first-loss investors? On this topic, Walsh notes and admits that demand and inquiries mostly concern positions above first-loss. He says:
“In most transactions, there’s typically a thin first-loss layer, which functions as the equity piece. The mezzanine and senior tranches are generally where external ratings are most commonly applied—but that’s not universally the case. It depends on the structure and the intended use of the rating.”
Hogan adds: “In transactions where funds hold the first-loss position and apply leverage, a key part of the analysis is understanding how the structure ensures that, as losses are absorbed through the first-loss layer, any rated tranches or senior positions remain insulated.”
Vincent Nadeau
News Analysis
Asset-Backed Finance
Insurers among LPs turning to unrated ABF amid capital pressures
Institutional investors step into ABF for yield and diversification as banks retreat
As momentum continues to build behind ABF, institutional investors are increasingly turning to the space in search of yield, scale and diversification. Chief among them are insurers – one of the largest sources of private capital worldwide – despite long-standing concerns over structural complexity and the unrated nature of many transactions.
ABF deals often fall outside the remit of traditional credit ratings, although their unrated nature is not necessarily a red flag, as
commentary from Oaktree Capital
noted earlier this week. In fact, for experienced investors, the absence of ratings can serve to widen spreads and reduce competition – potentially offering investors better returns.
“Even with the unrated category, because of the short duration nature of a lot of these ABF strategies, it still looks very attractive from our perspective,” says Tully Cheng, md and head of EMEA insurance analytics and institutional solutions at Neuberger Berman.
Capital charges under Solvency II remain a key consideration for insurers assessing ABF strategies, particularly where assets are unrated. “Under Solvency II, unrated products fit somewhere between triple-B and double-B,” Cheng explains.
Despite these regulatory considerations, insurers are becoming more comfortable investing in ABF due to its strong structural alignment with their liability profiles – especially given the shorter duration and self-amortising characteristics inherent in many ABF strategies. ABF lending, as well, can also offer insurers diversification away from traditional corporate credit exposure, which is particularly beneficial in more volatile credit environments
However, Cheng notes that what poses a greater challenge than ratings is securitisation capital treatment. “A number of ABF securities fall under securitisation rules,” he says. “If they’re not STS – and almost everything in ABF isn’t – that balloons the capital charge pretty meaningfully.”
While European regulators have begun to consult on easing these “onerous capital charges” – as described by Cheng – asset managers are, in the meantime, adapting. “One approach is to simply exclude securitisations from the ABF lineup,” he says. “Another is to keep a small allocation or wait for the regulation to evolve.”
Insurers step up to fill bank-shaped hole
As banks pull back from ABF amid tightening capital requirements and liquidity constraints, insurers are stepping into the breach, though they remain largely focused on the investment-grade portions of the market. According to Brendan Beer, md and co-portfolio manager at Oaktree Capital, this shift is creating space for alternative capital providers to fill a crucial middle segment of ABF.
"Asset-backed financing may become increasingly cumbersome for banks, and insurers have an important role to play, filling in for the banks, but insurers generally stick to the somewhat narrow investment grade segment of the larger ABF market," Beer explains.
This reduced competition from traditional lenders creates favourable supply-demand dynamics, allowing specialist private credit managers to capitalise on opportunities emerging in the wake of banks, as explained in the recent commentary from Oaktree.
"We believe the next chapter in the private credit story is the migration of ABF toward alternative capital providers, specifically in the core ABF segment that sits between senior, investment grade lending and the opportunistic end of the risk spectrum," he continues. "Traditional senior lenders, such as insurers and banks, are limited by their business models and regulatory frameworks."
Despite the complexity, insurers are clearly engaging with the space. “Insurers in the UK and across the continent see this as particularly attractive,” Cheng adds. “Given the breadth of ABF structures and durations, it’s a very natural fit to help manage liability-side considerations.”
Gilles Drukier, md and head of EMEA insurance solutions at Neuberger Berman, points to the growing normalisation of unrated credit within insurance portfolios – particularly on the continent. “Private debt plays a different role in Europe than it does in parts of the UK,” he says. “Insurers tend to define an unrated private debt bucket – that’s become quite an item in strategic asset allocation.”
He adds: “Now it’s well defined. A lot of insurance companies have allocations to that space, and they know that direct lending – where they started to invest – is usually unrated. So they’re familiar with the space, and they allocate to it. When they look at that unrated bucket, they also consider all the strategies available in private debt, and asset-backed lending is working very well in a couple of instances.”
ABF offers very short-dated, high-return, self-amortising features and brings a risk profile that is differentiated from corporate credit. “When you think about it, a lot of the exposure insurance companies have – outside of real estate – is linked to corporate risk, what we like to call EBITDA risk,” Drukier explains. “ABF offers a diversification away from EBITDA, because it’s all about asset coverage, LTV metrics.”
New lenders, new rules
According to Oaktree’s Beer, sophisticated deal structuring is key to managing risks in unrated ABF transactions. "Experienced managers can structure to control risk using various constructions including dynamic borrowing bases, strict collateral eligibility criteria, discounted collateral purchase prices, originator earn-outs, asset level approval rights, performance triggers – which redirect cash if breached – reserve accounts and excess spread," he explains.
Expertise is an important component in navigating the ABF market, as emphasised in private markets. As Beer notes: "Away from structural protection, we believe there is no better protection than having the institutional insight to avoid the wrong deals, the wrong collateral and wrong originators altogether."
He underscores that discipline in deal selection is central to Oaktree’s strategy: "The advantage of Oaktree’s scale isn’t the investments which we make on behalf of clients, but rather the deals which we don’t pursue."
Manuel Kalbreier, md and alternative investments specialist at Neuberger Berman, agrees that ABF’s characteristics make it a strong fit for insurers. “What we’re seeing is that even unrated ABF offers very interesting characteristics: it’s diversified, carries a different type of underlying risk, is shorter in duration, and generally delivers good returns,” he says. “It is an area of high interest for insurance companies, because it fits their profile really well.”
Defined benefit pension plans, by contrast, tend to have fewer constraints around maturity and duration, Kalbreier notes. As a result, they often gravitate more toward longer-dated assets like direct lending. “Whereas ABF is in a bucket that fits insurance companies’ return requirements quite well.
Looking ahead, Beer sees a dual future for ABF structures. "Some collateral types and structures will migrate towards standardised formats, particularly those situations which anticipate 'take-outs' with rated, syndicated securitisations," he says. "However, Oaktree also sees a steady supply of market participants – asset originators, banks, funds – with unique capital needs, which do not fit a standard template."
He notes that bespoke financings will persist due to factors such as corporate growth ambitions, uncertain origination volumes, regulatory constraints, or novel credit offerings lacking established performance histories.
The appeal of ABF extends far beyond insurers and across the breadth of the institutional investor universe. “More broadly, even beyond insurance, ABF is a pretty attractive space,” Cheng says. “We’ve seen some cannibalisation of public equities in favour of more alternatives, more core fixed income. And when we think about what that alternative bucket looks like, ABF looks quite attractive.”
Kalbreier highlights three structural trends driving ABF’s appeal: bank retrenchment, the rise of fintech lending, and the evolution of private credit. “We’ve effectively seen three large trends,” he says. “The first is the general bank retrenchment which started in 2008, with step changes like the collapse of Silicon Valley Bank.”
The second is the rise of fintech lenders, asset-light platforms that don’t fit easily into traditional ABS categories – as Neuberger Berman previously highlighted in a
commentary
at the start of the year. “There’s a whole new ecosystem of fintechs that are, by definition, asset-light, and want to offer a tech service rather than be a lender or a bank,” Kalbreier explains.
The third trend is the evolution of private credit itself. “There are more and more private credit managers with broader capabilities and expanding areas of expertise,” he adds.
Together, these dynamics are creating a growing market for bespoke, structured solutions. “You’re moving away from the very standardised listed ABS space,” he says. “There’s now more of a bespoke service being offered, where managers can charge a premium over the classic listed space.”
That shift has opened new opportunities for investors able to underwrite complexity. “If you’re a fintech platform looking to finance specific consumer lending activity that doesn’t fit neatly into a traditional box, you’ve historically found yourself in a bit of a desert,” Kalbreier explains. “There just wasn’t a natural source of capital for that profile.”
Now, however, private credit managers are stepping in. “Private credit managers are happy to take on bespoke types of risk that fit a fintech platform far better than the classic, cookie-cutter model,” he says, “and they can charge a premium for doing so. It’s the natural outcome of a market that’s evolving and expanding to accommodate more complexity.”
Oliver Little, svp and head of UK insurance solutions at Neuberger Berman, sees this evolution reflected in manager strategies. “One is to take a fairly vanilla, large pool of loans with lower inherent risk and lever it up to get the kind of returns they’re looking for. The other is to go down the bespoke route. There’s potentially a little more risk at the deal level, but then you don’t have to use leverage in quite the same way and can structure deals to enhance loss protection.”
As capital continues to flood into traditional lending strategies, returns are beginning to compress – pushing investors to look elsewhere to generate yield. “Given the amount of capital piling into the direct lending markets and the economics of supply and demand, those spreads are going to come down. And I think ABF could be the new frontier for insurers and institutions looking to earn a premium,” states Little.
That premium, according to the Neuberger Berman team, is not about mispricing. It is about structure. These dynamics often result in spreads that appear misaligned with the underlying credit quality – what looks like subprime pricing applied to prime borrowers.
The same applies in institutional lending. “It’s not just about liquidity constraints,” Drukier adds. “It’s the banking system being constrained by regulatory issues.”
Coming of age
As ABF matures, it is also becoming more clearly defined as a standalone allocation within private credit portfolios, putting a name to what was once a scattered set of strategies.
Oaktree is just one example of the many firms increasing their commitment to growth in ABF. It has expanded its ABF team with several senior hires and internal promotions in recent months – and Beer shares more are to be announced in the coming weeks.
Oaktree’s ambitions for its ABF strategy extend beyond the US, Beer says, with plans to establish dedicated ABF resources in London to collaborate with the firm’s existing European credit and real estate teams, and in the Middle East later down the line.
“In private debt, large asset allocators typically have three established buckets – direct lending, commercial real estate debt, and infrastructure debt,” Kalbreier explains. “Additional private debt exposures tend to be more tactical. However, the nomenclature is evolving. Allocators now approach their private credit space more systematically across different strategies and build the right diversification.”
Some asset owners prefer a consolidated approach, relying on one manager to provide broad access. Others want granular control, picking managers for each building block. “Either way,” Kalbreier says, “it’s a sign of maturity in how private credit portfolios are being structured.”
SRT Market Update
Capital Relief Trades
Romanian SRT
SRT market update
The European Bank for Reconstruction and Development (EBRD) and UniCredit have closed a synthetic securitisation.
Structurally, the EBRD is providing credit protection of up to €77.5m on the mezzanine tranche of a synthetic securitisation in the form of an unfunded guarantee. The underlying portfolio is a granular portfolio of both SME and corporate loans originated by UniCredit. The transaction forms part of UniCredit’s longstanding and wider ARTS programme. This is both the EBRD and UniCredit’s first SRT in Romania.
Through this cooperation, UniCredit has committed to redeploying the RWA relief achieved to new lending for SMEs and corporations in the country. An amount equal to 120% of the EBRD guarantee will be dedicated to projects that support climate action and environmental sustainability, aligned with the EBRD’s Green Economy Transition (GET) criteria.
Vincent Nadeau
SRT Market Update
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Regional debut
Third Coast Bank closes first SRT with EJF Capital
Texas-based Third Coast Bank has completed its debut synthetic securitisation, partnering with EJF Capital on a CRE transaction.
The transaction references a US$200m revolving mortgage loan (the loan), originated by Third Coast Bank and secured against a portfolio of eleven master planned residential communities across Houston, Dallas and Austin.
Following the origination, Third Coast Bank created participation interests in the loan, one of which was sold to EJF CRT 2025-1 Depositor LLC (the depositor), who subsequently sold that participation interest to EJF CRT 2025-1 LLC (the issuer). Third Coast Bank retained the participation interests not sold to the depositor. The issuer then pledged the interests to US Bank Trust Company and issued two tranches of notes—Class A-1 and Class M-1—under Series 2025-1.
Third Coast Bank retained the senior tranche, while affiliates of the depositor acquired a portion of the mezzanine notes. EJF Financial Debt Strategies, an affiliate of EJF, sponsored the deal and will hold the equity of both the depositor and the issuer.
The transaction aims to lower Third Coast Bank’s RWAs, as well as to reduce the ratio of loans for construction, land development and other land to its total capital.
Cadwalader, Wickersham & Taft acted as legal counsel to the bank, while Mayer Brown served as legal counsel to EJF Capital and its affiliates.
Nadezhda Bratanova
SRT Market Update
Capital Relief Trades
New player
EIB Group and ABN AMRO sign synthetic securitisation
The transaction is the first synthetic securitisation entered into between Dutch lender ABN AMRO (ABN) and the EIB Group. It references a portfolio of over €1bn in existing Dutch SME and corporate exposures and enables ABN to free up capital (€1.2bn) for new lending to Dutch SMEs and Mid-Caps, of which at least 30% will be allocated to projects aligned with criteria for climate action and environmental sustainability. Such focus aligns closely with the commitment of ABN and the EIB Group to support the transition to a low-carbon economy.
Structurally, both the EIB and EIF are involved in the transaction. The EIF is providing protection on the mezzanine tranche of €150m and on the senior tranche of €835m. The EIF’s mezzanine tranche exposure as well as part of the EIF’s senior tranche exposure is in turn counter-guaranteed by the EIB. The junior tranche is fully retained by ABN. Through this transaction, ABN expects to realise a RWA reduction of around €650m at closing.
Other key features include synthetic excess spread, a three-year revolving period and pro-rata amortisation of the senior and the mezzanine tranches, subject to performance triggers.
The deal confirms previous intelligence and announcements, which identified ABN as a prime candidate for SRT issuance.
Vincent Nadeau
SRT Market Update
Capital Relief Trades
Spanish pipeline
SRT market update
Santander is in market with an SME-focused SRT. The upcoming deal is expected to reference a granular SME portfolio in the range of €2bn to €3bn, however final size of the placed tranche(s) remains unclear and will depend on investor appetite and adjustments to the underlying asset pools.
In terms of execution, the deal is targeted to price in the next two to three months, sources suggest. Precise tranche details have not been disclosed, however, the deal is likely to feature a mezzanine or junior mezzanine tranche.
Market participants also share that deal timelines remain uncertain as heightened volatility continues to impact portfolio mixes and pricing expectations. As sentiments keep shifting on a weekly basis, issuers may begin to reassess tranche sizing and pool selection, they add.
Regarding the Santander trade and the expected pricing within the current broader market volatility, one investor notes: “It should be wider (than comparable trades), but how wide isn’t clear yet. Pricing is expected to come in wider than comparable transactions, though the extent remains uncertain. One investor points out a recent shift in the broader credit market, where investment grade deals have widened by around 100bps, suggesting that SRT spreads could follow a similar path."
Despite ongoing tariff turmoil, sources note that regions like Spain will remain a core market for SME SRT origination, with banks pursuing capital relief by both funded and unfunded structures.
Nadezhda Bratanova
News
ABS
ESG securitisation issuance regains momentum with illimity and Auxmoney transactions
Back-to-back deals point to growing sustainability-linked pipeline for 2025
European ESG securitisation appears to be regaining momentum, with illimity and Auxmoney finalising two transactions in as many days. The back-to-back deals reflect the renewed appetite for sustainability-linked ABS and suggest ESG-labelled issuance is firmly back on the agenda for 2025,
following a rebound in activity through 2024
as macroeconomic stresses eased.
Italian digital bank illimity yesterday announced a €45m securitisation programme in partnership with green fintech Ener2Crowd, aimed at supporting the growth of SMEs in the region through the use of performing credits, technological innovation and energy transition. The transaction was supported by Italian securitisation fintech, Cardo AI, who acted as data agent.
Meanwhile, German digital lending platform, Auxmoney, has closed its largest social ABS to date under the Fortuna programme.
Fortuna Consumer Loan ABS 2025-1
was upsized to €425m when it priced on 27 March, having been met with strong investor demand.
The STS-compliant transaction is backed by a diversified pool of unsecured consumer loans originated via Auxmoney’s platform, with at least 50% of the collateral pool qualifying under Auxmoney’s Social Bond Framework. Second-party opinion was provided by Sustainable Fitch.
Since its capital markets debut with the first Fortuna transaction in 2021, Auxmoney has issued at least one deal in the programme each year – bringing their total issuance volume close to €3bn. The Fortuna programme holds a
reputation
for consistent issuance and repeat investor participation, issuing even through close-to-fallow ESG issuance years of 2022 and 2023.
“As a well-known repeat issuer, Auxmoney is an excellent platform to attract leading investors. We're thrilled to have placed a new deal only six months after our previous one, including to some new investors,” Boudewijn Dierick, md at Auxmoney Investments, said in a statement. Daniel Drummer, cfo at Auxmoney added that the deal reflected “strong investor confidence irrespective of market sentiment.”
Together, the two transactions offer further evidence of a sustained recovery in the ESG-linked securitisation market, following difficult times in 2022 and 2023, as investor appetite for sustainable structured finance continues to grow.
While these recent deals highlight renewed momentum in the ABS space, rising interest in ESG-labelled issuance is also apparent in the SRT market. The EIB is leading this charge, with several green and social SRTs completed in recent months – including another just
last week. Market participants continue to suggest the development of ESG frameworks in SRT could help unlock further issuance in 2025.
News
Structured Finance
Janus Henderson and Guardian form partnership for public fixed income portfolio
Deal sees asset manager overseeing US$45bn portfolio with insurer investing US$400m of seed capital
Janus Henderson Group
and the
Guardian Life Insurance Company of America
have formed a strategic partnership, in which Janus Henderson will become the insurance company’s investment grade public fixed income asset manager. The transaction is expected to close at the end of the second quarter of 2025 and will see the asset manager manging a US$45bn portfolio for Guardian’s general account, spanning investment grade corporates and securitised credit.
The deal will see Guardian invest US$400m into Janus Henderson and receive equity warrants alongside “other economic consideration”. Members of Guardian currently involved in supporting the management of the portfolio will have the opportunity to join Janus Henderson.
The agreement provides an opportunity for Janus Henderson to strengthen its fixed income and multi-asset solution strategies, ceo
Ali Dibadj
said in a statement.
“This partnership supports the execution of Janus Henderson’s client-led vision of amplifying our strengths in fixed income, multi-asset solutions, and model portfolios, while greatly expanding our presence in the institutional market and insurance space,” said Dibadj.
The companies will also co-develop proprietary, multi-asset solution model portfolios for Guardian’s dually registered broker-dealer and registered investment advisor, Park Avenue Securities, which has around $58.5bn of client assets under management.
Andrew McMahon, Guardian chairman and ceo, said the partnership with Janus Henderson was driven by shared values on collaboration and dedication aimed at long-term, mutual growth.
In addition to sharing McMahan’s views surrounding the key drivers to the deal, Dibadj said the agreement "intends to achieve mutually beneficial outcomes for policyholders, our clients, shareholders, and employees".
The deal brings the aggregate value of global fixed income assets managed by Janus Henderson to more than US$147bn, with US$109bn accounted for by global insurance clients.
News
Asset-Backed Finance
Litigation finance venture debuts amid surging claims market
New JV targets overlooked SME and consumer litigation market, as investor appetite for claims-based assets grows in Europe
Litigation finance is entering a new phase of maturity, with funding shifting from opportunistic, one-off cases towards platform-based, scalable models. Capitalising on this shift, MDPG Advisory founder Matthew Gwynne and S&C Capital founder Edwin Harrap have launched Litigation Capital Solutions (LCS), a new joint venture aiming to open the doors of legal finance to underserved segments, including SME disputes, consumer claims and claimant-side law firm lending.
“We saw a unique opportunity to connect credible, exciting litigation funding opportunities with institutional investors who want exposure to uncorrelated, real-asset returns,” says Harrap. “This is a market that’s dynamic, but often overlooked.”
Traditional litigation funding, led by players like Burford Capital, has historically focused on high-stakes commercial litigation. However, LCS is turning its attention to a broader, more scalable middle market: claims that are smaller in size, but pooled and structured for portfolio-level investment.
“Law firms, especially those handling SME and consumer claims, are undercapitalised and can’t easily access financing,” explains Gwynne. “But these claims often rely on settled legal principles, making them a great fit for credit-oriented investors.”
LCS’s £130m pipeline and growing investor appetite
LCS already has several active mandates, including launching an SME litigation fund, raising capital for legal lending platforms and supporting firms focusing on consumer and personal injury litigation.
The firm’s pipeline exceeds £130m, signalling strong demand from legal and investment communities – particularly US-based specialty credit funds, who are more familiar with structured litigation finance, according to Harrap.
Behind the scenes, due diligence at LCS focuses less on legal theory and more on law firm fundamentals – credibility, win rates and alignment of incentives.
“Deals don’t fall apart because cases are lost,” says Gwynne. “They fail when capital is deployed without oversight. We structure deals so that firms stay motivated and risks are well-understood.”
LCS’s hybrid fluency in litigation and private credit is a key differentiator as legal assets become more accepted within structured credit markets, especially in Europe, where interest is accelerating.
“This market is further along in the US, but transatlantic funds are entering the UK and Europe fast,” notes Harrap. “They know credit, data and structure. They just need partners who understand the litigation landscape.”
This sentiment is echoed by another market participant, who notes that investor interest in claims-based assets is gaining momentum, particularly in the UK, where legal outcomes tend to be more favourable to investors.
“In the UK, winners typically recover legal costs – unlike in the US, where even a win can still leave parties out of pocket, so cashflows are less certain,” the source explains.
The asset class also benefits from strong historical data, insurance coverage and downside protections, such as case-loss triggers.
“You can look at loss rates, historic recovery rates, even data from collection curves for certain consumer claim types. It’s not just legal theory - it’s something you can model, making it easier to assess the strength of a claim,” the source adds. “That’s part of what makes this asset class so compelling.”
Once a niche play, litigation finance is now increasingly seen as a natural extension of the private credit playbook.
“There’s definitely convergence between credit investing and legal finance,” says Harrap. “Legal assets are becoming more data-driven, structured and scalable. That makes them attractive in today’s hunt for uncorrelated, high-yield opportunities.”
Marta Canini
News
Capital Relief Trades
Latest SRTx fixings released
Faring worse
This month, policy uncertainty and its associated market volatility have taken a clear position of prominence within the global financial markets.
The current scenario of across-the-board tariffs accompanied by retaliatory tariffs, has the potential to weigh on corporates’ input costs and profit margins, beyond a ‘one time’ upward price level shock. Against this evolving and intense backdrop, leading economists and macro strategists are currently debating, or evaluating, whether we should expect a slowing of growth and/or a recession. As such, heightened geopolitical uncertainties could lead to more frequent episodes of deleveraging for the remainder of the year.
Of course, past periods of market volatility have provided opportunities for the broader private credit to serve as a stabilising source of financing for a wide range of borrowers in a variety of market conditions. Additionally, the wider macro volatility impacting liquid credit markets should impact the SRT market in a more moderate fashion, given its buy and hold nature. Furthermore, as pointed out by Seer Capital Management, assets referenced in SRTs have historically outperformed in economic downturns based on careful credit selection and alignment of interest with banks. The recent spread widening, combined with the relatively calm reaction in the SRT market, may already present some opportunities for investors.
The latest SRTx fixings did not evade the uneasy macroeconomic picture, with (almost) every sentiment suggesting increased risk and widening. SRTx Spread Indexes have widened everywhere (Large corporate: EU +2.9%, US +6.8%; SME: US +7.9%), except for to the EU SME segment (-5.5%). This month’s figures also reflect the reported view that SRT spreads appear to have reached a floor late in the first quarter.
The SRTx Spread Indexes now stand at 831, 588, 813 and 1019 for the SRTx CORP EU, SRTx CORP US, SRTx SME EU and SRTx SME US categories respectively, as of the 31 March valuation date.
Unsurprisingly and spurred by the recent trade war, volatility has widened across the board (Large corporate: EU +17.9%, US +20.0%; SME: EU +2.7%, US +23.1%).
The SRTx Volatility Index values now stand at 69, 70, 66 and 80 for the SRTx CORP VOL EU, SRTx CORP VOL US, SRTx SME VOL EU and SRTx SME VOL US indexes respectively.
The story or sentiment is equally similar for liquidity, with all figures or sentiment displaying a widening trend (Large corporate: EU +18.4%, US +10.8%; SME: EU +18.4%, US +18.2%).
The SRTx Liquidity Indexes stand at 63, 60, 63 and 65 across SRTx CORP LIQ EU, SRTx CORP LIQ US, SRTx SME LIQ EU and SRTx SME LIQ US respectively.
Finally, the credit risk indexes are where market participants have expressed the most significant widening or riskier sentiment (Large corporate: EU +25.0%, US +31.3%; SME: EU +31.3%, US +5.9%). Standing at 75, the sentiment for US large corporates is at its highest since March 2023 (coinciding with the US Banking crisis and the launch of the SRTx benchmark). Also sitting at 75, the US SME segment witnessed a tamer variation month-on-month, aligning or illustrating the view that in a bit of dark irony, US business sentiment held up somewhat better than in the rest of the world since the beginning of the tariff war.
The SRTx Credit Risk Indexes now stand at 63 for SRTx CORP RISK EU, 75 for SRTx CORP RISK US, 66 for SRTx SME RISK EU and 75 for SRTx SME RISK US.
SRTx coverage includes large corporate and SME reference pools across the EU and US economic regions. The index suite comprises a quantitative spread index - which is based on survey estimates for a representative transaction (the SRTx Benchmark Deal) that has specified terms for structure and portfolio composition - and three qualitative indexes, which measure market sentiment on pricing volatility, transaction liquidity and credit risk.
Specifically, the SRTx Volatility Indexes gauge market sentiment for the magnitude of fixed-spread pricing volatility over the near term. The index scale is 0-100, with levels above 50 indicating a higher proportion of respondents estimating volatility moving higher.
The SRTx Liquidity Indexes gauge market sentiment for SRT execution conditions in terms of successfully completing a deal in the near term. Again, the index scale is 0-100, with levels above 50 indicating a higher proportion of respondents estimating that liquidity is worsening.
Finally, the SRTx Credit Risk Indexes gauge market sentiment on the direction of fundamental SRT reference pool credit risk over the near term. The index scale is 0-100, with levels above 50 indicating a higher proportion of respondents estimating that credit risk is worsening.
The objective of the index suite is to depict changes in market sentiment, the magnitude of such change and the dispersion of market opinion around volatility, liquidity and credit risk.
The indexes are surveyed on a monthly basis and recalculated on the last trading day of the month. SCI is the index licensor and the calculation agent is Mark Fontanilla & Co.
For further information on SRTx or to register your interest as a contributor to the index, click here.
Vincent Nadeau
News
CMBS
Switch closes landmark US$3.5bn green data centre securitisations
World's first public green data centre CMBS and largest green data centre ABS priced
Las Vegas-based data centre provider Switch has closed on two green-labelled securitisations totalling US$3.5bn, setting new milestones for both the data centre and structured finance markets.
The consecutive transactions – a US$2.4bn green SASB CMBS and a US$1.1bn green ABS – mark Switch’s debut in the CMBS market, as well as its third ABS issuance under its master trust.
The CMBS is the world’s first green-labelled data centre CMBS transaction and the second-largest data centre CMBS issued to date. The ABS, meanwhile, marks the first public green data centre securitisation in the US market and the largest globally, following
Vantage’s debut deal in the UK last year.
Issued just one month apart, the deals position Switch as the largest issuer of securitised data centre debt in the past year – with total issuance in the last 12-months exceeding US$5.2bn. The combined US$3.5bn proceeds will refinance the bulk of the firm’s outstanding acquisition debt following its 2022 take-private transaction by DigitalBridge and IFM Investors.
The CMBS is backed by its Las Vegas 7, Las Vegas 9 and Reno 2 data centre facilities, and was sold across seven tranches to 66 different investors. The ABS, backed by Las Vegas 10 and 11, was structured in two classes of notes.
Switch was supported by a wide range of major structured finance advisers on the two deals. Citigroup, Barclays, Goldman Sachs, RBC Capital Markets and Wells Fargo acted as joint bookrunners and co-lead managers on the CMBS. Switch was also advised by Simpson Thacher & Bartlett, while the lenders were advised by Dechert and the underwriters represented by Orrick.
On the ABS, Morgan Stanley and TD Securities acted as co-structuring advisors and joint bookrunners, alongside BMO Capital Markets, MUFG and Société Générale. Citizens, ING, Scotiabank, Standard Chartered and Truist served as passive bookrunners, with BofA Securities, BNP Paribas, CIBC, Mizuho, NatWest, PNC and SMBC Nikko joining as co-managers. The Switch team were advised by Kirkland & Ellis, and the underwriters were represented by Latham & Watkins.
All series of notes across both transactions were designated as green bonds. The ABS is aligned with ICMA’s Green Bond Principles and Switch’s own Green Financing Framework, while the CMBS received second-party opinion from Sustainalytics.
The deals mark a major milestone for the global data centre and securitisation markets, underscoring the
growing investor demand
for highly rated digital infrastructure credit – particularly with ESG-labels.
Switch cfo, Madonna Park, noted the financing highlighted the strength of the firm’s platform and market appetite. “New and existing investors continue to show strong interest in our differentiated assets and business model,”
she said in a statement, “and we plan to remain a repeat issuer.”
Talking Point
CLOs
EU CLO triple-A spreads see modest widening
Poh-Heng Tan from CLO Research provides insights on EU CLO triple-A trading colour which despite the relatively small notionals involved, provide valuable insights into current secondary triple-A pricing
Shorter-dated CLO bonds changed hands in the 130–140bps discount margin (DM) range last week, with PRVD 4X AR covering at 129DM and names like BRGPT 2X A and AQUE 2020-5X AR trading closer to 140DM.
Longer-dated bonds were observed in the 140–150DM range—for example, ACLO 13A A1 at a 141DM cover, and FICLO 2023-1X AR at 150DM.
| |
MVOC |
Notional (BWIC) |
Price Colour |
Dealer DM | WAL |
DM |
Deal Name |
Deal Closing Date |
Reinv End Date |
|
BNPAM 2021-1X A |
152.91 |
5,500,000 |
98.611 | DNT |
154 | 2.08 |
154 |
BNPP AM Euro CLO 2021 |
Jun 29, 2021 |
Sep 15, 2025 |
|
PRVD 4X AR |
159.02 |
4,000,000 |
99.020 |
|
129 |
Providus CLO IV |
May 20, 2020 |
Nov 19, 2025 |
|
BECLO 3X AR |
154.44 |
2,000,000 |
98.655 |
145 | 2.45 |
145 |
BlackRock European CLO III |
Jun 16, 2017 |
Jan 19, 2026 |
|
BRGPT 2X A |
161.25 |
8,600,000 |
98.900 |
139 | 2.35 |
139 |
Bridgepoint CLO 2 |
Jun 28, 2021 |
Jan 15, 2026 |
|
AQUE 2020-5X AR |
156.06 |
15,000,000 |
99.120 |
139 | 2.5 |
140 |
Aqueduct European CLO 5-2020 |
Sep 03, 2020 |
Apr 20, 2026 |
|
OCPE 2024-9A A |
156.02 |
3,000,000 |
99.752 |
154 | 4.84 |
154 |
OCP Euro CLO 2024-9 |
May 17, 2024 |
Oct 20, 2028 |
|
INVSC 9X AR |
154.11 |
2,500,000 |
99.205 |
155 | 5.2 |
154 |
Invesco Euro CLO IX |
Mar 23, 2023 |
Apr 20, 2029 |
|
CONTE 11X AR |
156.13 |
9,500,000 |
99.292 |
146 | 5.58 |
146 |
Contego CLO XI |
Jun 30, 2023 |
May 20, 2029 |
|
FICLO 2023-1X AR |
157.80 |
5,000,000 |
98.589 |
150 | 5.82 |
150 |
Fidelity Grand Harbour CLO 2023-1 |
Jul 25, 2023 |
Aug 15, 2029 |
|
ACLO 13A A1 |
158.32 |
3,500,000 |
98.862 |
143.000 |
141 |
Aurium CLO XIII |
Mar 27, 2025 |
Oct 15, 2029 |
Source: SCI, Intex, CLO Research
Several triple-A bonds either traded or received bids at relatively wide levels. BNPAM saw a notably wider cover DM due to underperformance, while BECLO 3X AR, OCPE 2024-9A A, and INVSC bonds were likely influenced by factors such as liquidity—and, in the case of INVSC 9X AR, performance considerations as well.
Specifically, the market does not appear to differentiate between managers with varying post-reinvestment period prepayment tendencies, which may present opportunities for more discerning investors. Some managers consistently run post-RP prepayment speeds well below the modelled 20 CPR.
Last but not least, ACLO 13A A1 was priced in the primary market at par on 30 January 2025, at a discount margin of 122bps. Since then, the bond has widened by 19bps—still relatively muted compared to the underlying loan market, which has moved by approximately 38bps.
The Structured Credit Interview
Asset-Backed Finance
ABF key pillar in AXA IM Alts' new evergreen private credit strategy
Christophe Fritsch, global head of alternative credit at AXA IM Alts, answers SCI's questions
Global alternative investment firm AXA IM Alts has made ABF a cornerstone of its newly launched diversified evergreen private credit strategy. Designed for the private wealth segment, the strategy will invest across the credit spectrum, from ABF to direct lending, aiming to generate long-term recurring income.
Christophe Fritsch, global head of alternative credit at AXA IM Alts, tells SCI why ABF is uniquely positioned to drive portfolio resilience and sourcing, how retail access is opening up and what sets the firm apart in an increasingly competitive market.
Q: How will ABF fit into your new evergreen private credit strategy?
A: ABF will be a key pillar and differentiator within our newly launched diversified evergreen private credit strategy. It will boost the robustness of the portfolio by increasing its risk diversification, enhancing its sourcing capacity and cashflow delivery while allowing for the exploitation of inefficiencies between private credit asset classes. We’re targeting a range of opportunities across corporate, consumer and real assets, such as significant risk transfer (SRT), private auto ABS and commercial real estate (CRE) debt.
Q: Why is now a good time to invest in ABF?
A: We think ABF provides attractive long-term value with superior returns while relying on robust fundamentals and structures. Investing in ABF does not increase the risk but grants investors additional returns thanks to structuring premiums.
Q: Are there other areas of private credit that you find particularly attractive at the moment?
A: Beyond mid-market corporate direct lending, we believe some of the most attractive areas of private credit are currently CRE debt and specialty finance strategies, such as SRTs.
CRE debt is attractive as it’s a great time to be a senior lender at the moment. After having corrected, real estate valuations are now stabilising in Europe, which creates a good entry point on the debt side. Considering the retrenchment of banks, investors can get attractive returns both on an absolute level and relative value basis since the illiquidity premium against traditional fixed income seems to be at its peak.
SRT remains a unique strategy in the private debt universe, giving access to very diversified portfolios in terms of asset classes, obligors, industries and geographies. These performing portfolios correspond to the core activity of major commercial banks and are traditionally not easily available to institutional investors. Investors with strong market access, that have the competences to do the credit underwriting can still source attractive deals.
Q: How does your new strategy make ABF more accessible to retail investors, particularly in light of the relaunch of ELTIF 2.0?
A: There are two key evergreen private credit structures – Luxembourg Part II funds for qualified private wealth investors and ELTIFs for a broader retail base. Our new strategy is a Luxembourg Part II structure, offering access to a diversified ABF portfolio through a simple and single format. It also allows ongoing subscriptions and redemption windows, thanks to a portfolio designed to guarantee natural liquidity even in a private credit framework. The relaunch of Luxembourg part II/ELTIF 2.0 allows to increase retail money portfolio allocation by efficiently giving investors access to new structures.
Q: What are your main sourcing channels for ABF?
A: We leverage on our established relationships with banks, advisors, originators and other asset managers to source the best opportunities for our investors. Many market participants view us as a trusted counterparty, given our long-term investment philosophy with a presence through the cycles, combined with our transparent and consistent underwriting approach.
The size and variety of our mandates allow us to be nimble in order to answer originators' needs across various asset classes and capital structures, without requiring external ratings. Finally, incumbency – the ability to secure follow-on opportunities with existing borrowers – plays an important role in our origination strategy.
Q: How do you see ABF defaults evolving, and how is your strategy positioned to navigate them?
A: Despite recent macro challenges including inflation, geopolitical uncertainty, and monetary tightening, corporate loan defaults have remained moderate, supported by resilient growth. That said, we have seen performance divergence across and within sectors. We expect defaults to gradually normalise in 2025, slowly rising to their long-term historical averages, but don't foresee a material increase thanks to central banks' easing cycle.
On the consumer side, household finances are generally solid. Debt service ratios are at decade lows in many countries, and household leverage is falling. We do see some dispersion, particularly between prime and non-prime borrowers and across geographies. For instance, savings have decreased in the US and are now in line with their long-term average, while they remain above pre-Covid levels in Europe and in the UK.
For 2025, we believe that the high level of savings should support future credit performance in the prime segments, while the weakening trend observed in low-credit profile borrowers should stabilise with inflation decreasing, notably in Europe. Overall, we anticipate continued idiosyncratic risk and dispersion, making credit selection and local expertise more critical than ever.
Q: Do you anticipate more consolidation in ABF?
A: In line with the trend observed in the previous years, we do expect consolidation to continue in the private credit space. Indeed, acquisitions are often seen by asset managers as the most efficient option to build their private credit capabilities or complement their products offering.
Partnerships with originators can also constitute an alternative to consolidation to increase sourcing capabilities. For instance, there were 14 publicly announced partnerships between banks and private credit managers in the 12 months up to September 2024 – mainly involving corporate direct lending, but also ABF.
Q: Any final thoughts for investors new to ABF?
A: ABF may feel like a newer segment to some investors, but it’s a long-established asset class. The key is partnering with managers who’ve been through full credit cycles and understand the nuances of structuring, sourcing and selection.
Marta Canini
The Structured Credit Interview
CLOs
Accunia maps a steady course in CLOs focussing on long-term value
Danish manager prioritises CLO complexity premiums and active credit selection over market timing
In the intricate world of structured credit, Accunia Credit management emerges as a thoughtful navigator, challenging conventional investment wisdom with a nuanced approach to CLO investing.
Speaking to SCI, David Altenhofen, head of investments at Accunia Credit Management says the firm’s viewpoint is it does not believe in timing the market but about time in the market, highlighting an approach that prioritises consistent, long-term engagement over short-term speculation.
He says: “We don't believe in forecasting, and we don't have a macro strategist giving views on where interest or growth rates will go down the line. I'm not saying it's not important, because we are seeing right now it is, but forecasting is difficult. We don't believe in timing – that is for amateurs – but we believe in the CLO technology.”
However, Altenhofen notes the firm does believe in the importance of being in a market where you can pick up premiums.
“In the CLO space, especially, there's both the regulatory premium, there's an illiquidity or liquidity premium, and there's a complexity premium, and that is what we look at and where we believe it makes sense for our investors – that we can gain access to that.”
Benefits of being nimble
Accunia, who made history in 2015 by issuing the first CLO by a Nordic manager, sees value in exploring niche opportunities – for instance where larger asset managers might find investments too small to be worthwhile – Altenhofen says.
"We area nimble, and inflow of say €5m can make sense for us, as we can quickly deploy that, whereas a large asset manager with a need of deploying €100m in CLO double-B, for instance, can have an issue," Altenhofen explains.
“We have got lots of inflow, as structured credit has performed, but to the tune of €15m, then €10m, €5m and so on, so it’s more if you can do it on a constant basis, which is key.”
The firm's investment philosophy extends beyond solely financial analysis. It places emphasis on monthly manager selection/ranking as well as conducting detailed qualitative and quantitative assessments.
"Credit picking for the CLO managers will become more important going forward compared to the last 10 years because we haven't seen a nasty default cycle since the GFC," Altenhofen says, anticipating a potential shift in market dynamics. "However, historically, senior secured loans have demonstrated remarkable stability, with only two years of negative returns in the past 25 years. These loans have consistently performed well over several decades, and they form the foundation of the CLOs we invest in today."
Altenhofen highlights the fundamental advantage of CLOs, describing their structure as similar to a bank but without the risk of a traditional bank run.
"CLOs operate with a maturity transformation that is effectively inverted compared to banks, without the risk of a bank run. On the asset side, the loans typically have a short duration, while on the liability side, CLOs have long-term locked-in financing of 10 to 12 years. This structural feature enhances stability and ensures the resilience of the CLO framework. The great financial crisis served as a crucial stress test for the CLO market, and since then, we have seen even tighter documentation on the CLO side."
Managed versus static deals
Another key factor supporting CLOs is the role of active managers, Altenhofen emphasises. "We prefer actively managed CLOs over static deals. Active managers can trade credits as needed, adjusting portfolios in response to changing market conditions,” he says.
Beyond structural advantages, Altenhofen underscores the evolution of the leveraged loan market, which has expanded significantly over the past two decades. "Before the financial crisis, the average EBITDA of leveraged loan issuers was around €50m, resembling more of a middle-market loan today. Now, that figure has increased to €300m to €400m and higher in the CLOs.”
“Larger companies, which are more prevalent in CLO portfolios, are generally better equipped to weather prolonged economic downturns compared to smaller firms. Additionally, CLOs offer greater sector diversification, further enhancing their resilience."
Looking ahead, Altenhofen remains confident in the asset class. "These three pillars – the strength of senior secured loans, the structural integrity of CLOs, and the value of active management – will continue to support CLOs as a key investment vehicle in the years to come," he says.
Ramla Soni
Provider Profile
Asset-Backed Finance
Blackstone eyes EU infra financing gap as next trillion-dollar opportunity
BXCI to grow its ABF efforts, leverage insurance and retail capital, and bridge Europe's US$30trn infrastructure financing gap
Private credit has become the heart of Blackstone’s investment strategy, driving its expansion across Europe and globally. In 2024, the firm originated a record US$10bn in direct lending deals across the region. Its CLO division, based in Dublin and London, is another key element of the firm’s global credit business. As Blackstone looks ahead, its credit and insurance division (BXCI) is set to drive the firm’s next trillion-dollar opportunity. Executives Dan Leiter and Christopher Yonan outline how BXCI plans to capitalise on Europe’s US$30trn infrastructure financing gap to fulfill that vision.
Since its inception in 1985, Blackstone has steadily expanded its international footprint, establishing offices in London, Paris, Dublin, and other key hubs to tailor its credit strategies to Europe’s complex and fragmented markets.
“Our local presence in these cities gives us a distinct advantage – not just in bringing the right technology and products, but also in leveraging the deep regional expertise needed to execute deals effectively. We firmly believe in the power of good neighbourhoods for investing,” says Christopher Yonan, head of European infrastructure at BXCI.
Yonan, who transitioned from a legal career in project and structured finance at Milbank to senior roles at Lehman Brothers, Morgan Stanley and Jefferies before joining Blackstone in 2024, leads the firm’s European infrastructure push for BXCI.
“Europe presents a more fragmented market compared to the US,” adds Dan Leiter, head of international for BXCI and global head of liquid credit strategies. “This fragmentation presents challenges but also creates opportunities for a well-capitalised, regionally integrated player like Blackstone.”
Leiter, a finance veteran with nearly two decades at Morgan Stanley before joining Blackstone in 2024, highlights the firm’s impressive global coordination.
“We’re not operating in isolation. We work closely with the investment committees and other teams to ensure that we have a comprehensive view of the market and are aligned in our approach,” he says.
Insurance partnerships, private wealth influx and bank collaboration
Blackstone has also taken a distinctive approach to integrating insurance capital into its credit strategy. Unlike competitors that have chosen to acquire insurance companies, Blackstone has opted for a partnership-based model, working closely with insurance firms to align investments with their risk and return profiles.
With 27 insurance partnerships and over US$230bn in AUM, this strategy has proven scalable and resilient.
“Insurance is critical to our strategy – especially in asset-backed finance, where the majority of the capital structures we produce are investment grade, which aligns perfectly with insurance clients' focus,” he says.
Blackstone sees strong potential for retail and private wealth capital in private credit markets.
Recent data from Blackstone’s Private Wealth Solutions group supports this trend: in its latest Advisor Pulse survey of 309 financial advisors, over 60% allocated at least 5% of income-oriented portfolios to private credit, while more than 25% allocated 10% or more. The survey highlights a growing recognition among advisors that private credit offers a compelling balance of diversification, liquidity, and risk-adjusted returns.
“In private credit, we’re seeing a significant pickup in spreads compared to public markets,” explains Leiter. “Private credit currently offers a spread that’s roughly 200bp higher than comparable public alternatives.”
Part of Blackstone's approach to integrating insurance capital into its credit strategy is a collaborative model that includes partnering with traditional banks.
“In Europe, bank lending is still much more dominant than non-bank lending,” explains Leiter. “There is a huge opportunity to collaborate with banks rather than to compete.”
With banks scaling back in certain areas, Blackstone sees itself in a position to help banks optimise capital and manage their risks. "We’re able to partner with banks, especially in sectors like infrastructure and asset-backed finance, where banks are seeking to increase balance sheet velocity by syndicating portions of their lending books,” says Leiter.
Filling Europe’s infrastructure financing gap
“There’s a huge gap in infrastructure financing in Europe,” explains Yonan, “With an estimated US$30trn needed for infrastructure development, private capital has an unprecedented opportunity to step in and bridge the funding gap.”
He points to Europe’s ageing transportation infrastructure, grid systems, and power generation assets in need of modernisation – not just to support renewables, but also to meet the growing demand for digital infrastructure and electrification.
While outside of Europe, Blackstone’s recent C$7bn deal with Rogers Communications in Canada, showcases its approach to delivering large-scale, tailored structured credit solutions. Similarly, its joint venture with EQT last year further highlights the firm's ability to structure infrastructure deals across sectors and borders – capabilities that could be key in addressing the complexities of European markets.
“The push for digital infrastructure begins with data centres, which require immense power and connectivity,” says Yonan. “But that’s just the beginning. The demand then ripples across power generation, transmission lines, OEMs supplying equipment, and even EV charging networks. It’s a full ecosystem of investment opportunities.”
The ability to create customised infrastructure financing solutions, particularly for multi-jurisdictional projects, gives the firm an edge.
“BXCI’s scale and broad capital base really allows us to stand out in Europe,” says Yonan. “We can customise capital solutions and build structures that align with the needs of the companies we partner with. This flexibility allows us to address the unique challenges of different regions.”
Building on this flexible approach, Yonan emphasises that the thematic areas Blackstone invests in – digital infrastructure, renewables, and energy transition – are not short-term trends. “They’re long-term shifts that will continue to shape markets, and we’re positioning ourselves at the forefront of this evolution,” he says.
Marta Canini
Market Moves
Structured Finance
Job swaps weekly: Bayview names co-heads for new fund finance investment business
People moves and key promotions in securitisation
This week’s roundup of securitisation job swaps sees Bayview Asset Managementappointing two co-heads to lead its newly created fund finance investment business. Elsewhere,
RiskSpan
has appointed two to its advisory board as it ramps up its structured finance and private credit activity, while
Mayer Brown
has hired two former Kirkland & Ellis partners in its US structured finance practices.
Bayview Asset Managementhas recruited
Michael Timms
and
Colin Doherty
to serve as co-heads of its newly created fund finance investment business. The pair will focus on building out the firm's fund finance investment capabilities and expanding its asset-based finance (ABF) offerings.
Timms joins Bayview following an extensive career in US alternative investments, most recently serving as an md at 17Capital, where he led the origination and execution of an array of preferred equity and NAV loan investments with US-based alternative asset managers and funds. Prior to his tenure at 17Capital, Timms held key roles at Wells Fargo, helping build a market-leading fund finance lending business over an eight-year period.
Doherty joins Bayview after a decade at JPMorgan, where he was a key member of the structured equity financing group within the firm’s CIB Markets trading division. Throughout his tenure, he played a central role in the expansion of the group’s fund financing capabilities and held several leadership positions, most recently as the US head of private equity secondaries. Before joining JPMorgan, he worked in a similar capacity at UBS.
Meanwhile, RiskSpan
has appointed
Howard Kaplan
and
Susan Mills
to its advisory board as the firm seeks to expand its capabilities in the structured finance and private credit space.
Kaplan brings more than 35-years of experience to the firm, including three decades at Deloitte where he served as managing partner for its securitisation practice in New York for 11 years before becoming global lead client service partner for the likes of Goldman Sachs and MasterCard. He is a founding member of the SFA and between 2013 and 2021 served as a member of the board and executive committee, as well as currently serving on the advisory board for Union Home Mortgage.
Similarly, Mills brings more than three decades of leadership experience in the RMBS space, having held senior roles at Citigroup, Bank of America and Fannie Mae. Currently, Mills serves as md and head of RMBS capital markets and originations at Academy Securities, and as a member of the board of directors and Chimera Investment.
Mayer Brownhas hired Kirkland & Ellis partners
Rudgee S Charles
and
Jeff O'Connor
to its structured finance practices in New York and Chicago respectively. Charles joins the firm as partner after six years at Kirkland & Ellis, having previously held spent two years at Latham & Watkins. His practice spans traditional and esoteric finance, across warehouse financings, trade receivables financings, private placements, oil and gas securitisations, and registered asset-backed securities offerings. O’Connor will take up the role of counsel at Mayer Brown. He left his role as partner at Kirkland & Ellis in January after 30 years with the firm.
Rafe Khokhar
has also joined Mayer Brown’s capital markets practice as a partner in the Dubai office. Khokhar specialises in advising sovereign entities, financial institutions, sovereign wealth funds and asset managers on capital markets and Islamic finance and Sharia-compliant products, regulatory capital instruments and liability management transactions. He was previously counsel at Dechert, which he joined in February 2023, having worked at Clifford Chance for 14 years before that.
Latham & Watkins
has hired longstanding A&O Shearman duo Franz Ranero
and
James Smallwood
as partners in its London-based structured finance practice. Both leave their positions as partners at A&O Shearman, with Ranero having spent 24 years with the firm and Smallwood having served for 13 years. Ranero and Smallwood have a particular focus on CLOs and bespoke funding solutions and the hires form part of Latham & Watkins' plans to expand its capabilities in Europe and the US as a "key priority", according to a statement.
GAM Investments
has named
Rom Aviv
md - head of ILS, based in Zurich. Aviv had previously founded (re)insurance and capital markets consultancy RHA Advisory in January 2022, having worked at Agritask, IBI Investment House and Twelve Capital before that.
Redevco
has strengthened its real estate debt platform with the appointments of
Emma Huepfl
as senior advisor and
Rosalind Walker
as senior associate. Huepfl, who co-founded Laxfield Capital and previously co-led the EMEA credit platform at CBRE IM, will provide strategic investment guidance and support the platform’s growth. Walker, who brings extensive RE lending and underwriting expertise from her time at PGIM and Wells Fargo, will focus on sourcing and executing loan transactions across European markets.
These appointments signal Redevco’s ambition to scale its debt business and broaden its market reach. The platform, launched earlier this year, aims to fund transitional and new-build assets through senior and mezzanine loans.
And finally, Wilmington
Trusthas appointed
Morgan Krone
as senior associate general counsel for Europe. Krone has worked at A&O Shearman for the last 28 years, most recently as a partner and head of the corporate trust team. He has advised corporate trustees and agents - including Wilmington Trust - on the full range of debt and loan market products and structured financings in EMEA and the Asia Pacific region.
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