Kartesia is pursuing its strategy of investing opportunistically in the collateralised loan obligation (CLO) market, thereby continuing KCO III investment thesis. In July, KCO IV closed its first CLO deal by acquiring the majority of the subordinated notes of BNP Paribas AM 2017 CLO, a new European CLO vehicle.

Finding the best deal on a favourable CLO market

“We are seeing favourable market conditions, with liabilities pricing at record low levels and a solid credit environment across Europe in the short to medium term”, says Associate Director Julien Rigon, who led the transaction alongside Jaime Prieto, one of Kartesia’s founding partners. The key was to spot the best deal at the right price to maximise the return for KCO IV’s investors. The investment team waited six months for the perfect opportunity to come along. “After BNP Paribas called to tell us about their new CLO vehicle, we conducted a month of due diligence to make sure we were comfortable with the opportunity and the investment strategy”, says Julien. Kartesia negotiated a tailor-made deal with the arranger and manager, closing the transaction in July.

Kartesia, a proactive and reliable partner for CLO managers

“With one of the largest 1.0 CLO platforms and a 2.0 CLO launched in 2015, BNPP AM has a track record that demonstrates its ambition and professionalism in loan credit investing”, says Julien. The Kartesia and BNPP teams actually know each other well, having collaborated on various deals, including a special investment compartment within KCO III on deals originated by BNPP AM as well as other specific credit situations. Holding a majority position in the subordinated notes, Kartesia will be a key and proactive partner to BNPP AM. Julien describes the fruitful relationship between the two teams, who interact on a regular basis. This high level of trust is rooted in Kartesia’s investment philosophy. “We have built a solid reputation as a reliable partner for CLO managers”, says Julien. Kartesia intends to continue investing in CLOs, while sticking by its opportunistic approach. “In each of our three activities – primary debt, secondary debt and CLOs – we take great care to make our moves at the right time”, Julien concludes.