Kartesia is delighted to announce that it has partnered with KKR for the latter’s 19th European structured credit deal, with a commitment to purchase a sizeable portion of its Subordinated Notes. Given Kartesia’s long-term approach to the Structured Credit market, we consider it important to align ourselves with managers that have demonstrated a similar commitment by executing a good risk management approach in their portfolio selection throughout cycles. 

KKR was selected because of its expertise and proven track record in credit and its “one-firm” business model. The firm’s core European leveraged credit team has worked together for more than 16 years analysing over 2,200 European deals and is encouraged to seek to use the breadth of KKR’s resources to source, execute and monitor opportunities before committing investor capital. 

This resonates well with Kartesia’s ability to combine long-term commitments with credit and structural expertise, creating a unique platform and valuable partner to leading CLO issuers and managers. By building and leveraging these relationships Kartesia is able to offer its investors access to a differentiated risk profile that will enhance returns and diversify risk.

Throughout 2018 Kartesia has been monitoring the Structured Credit market to find value amidst the turbulence in the credit markets. The year was characterized by a wave of credit spread tightening that peaked in February and was then followed by a general widening of spreads. This has created interesting opportunities for Kartesia to arbitrage the credit spread differential between the underlying asset spreads and the CLO liability spreads.
 
Eddie O'Neill, Head of Euro Leveraged Credit at KKR, commented: “We are delighted that Kartesia has chosen to invest in the equity of our latest transaction - Avoca XIX.  Their long-term and disciplined approach to investing aligns well with KKR’s investment philosophy.  We are excited to partner with them on this transaction and look forward to developing a deeper relationship between our firms.”

Sharif Anbar-Colas, Structured Credit Portfolio Manager at Kartesia, said: “KKR’s commitment to the structured credit market combined with their conservative credit approach made them a natural partner for us. As we expand our footprint in this space we look forward to building upon this relationship to the mutual benefit of our investors and partners”