45 / 204
Rothschild & Co | Annual Report 2017
43
1. Overview
4. Financial statements
3.
Management report
2. Business review
Rothschild Credit Management
Rothschild Credit Management (RCM) is active in both the European and US leveraged loan markets. It has €3.5 billion
of assets under management across CLOs, senior secured credit and multi-strategy credit funds, as well as managed
accounts. At the heart of RCM’s investment philosophy is capital preservation based on fundamental credit analysis
combined with active management. As at 31 December 2017, the Group’s investment in RCM products represented
€72 million.
CLO management business
The combined European and US teams actively manage six
CLO funds:
• three Ocean Trails CLOs invested in US assets;
• three Contego CLOs invested in European assets.
Our CLOs are consistently ranked at the top of the European
standings and display low default rates. This is the result of
deep fundamental credit analysis, conservative portfolio
construction and highly experienced teams. During 2017,
RCM launched Contego IV, a €360 million European CLO,
and started the fundraising for Contego V, a European CLO
with a final target size of c.€400 million planned for the second
quarter of 2018.
Oberon strategy
Oberon is a family of unlevered senior credit funds and
managed accounts invested in a portfolio of secured debt
across a diverse selection of large cap Western European
corporate borrowers. During 2017, the RCM team raised
over €300 million for its third Oberon fund, bringing the total
fundraising effort for this fund to c.€460 million and
the overall Oberon strategy commitments to €1.5 billion,
of which c.€760 million on accounts managed on behalf
of institutional and private clients. The Oberon strategy
continues to deliver predictable quarterly cash yields to its
investors and to outperform the benchmark Credit Suisse
Western European Leveraged Loan Index.
Elsinore multi-strategy credit
Launched in 2017, Elsinore seeks to offer a unique proposition
to our clients: a careful combination of some of Merchant
Banking’s most successful credit strategies in a single, actively
managed portfolio. With allocations across a range of credit
strategies, including private debt, high yield bonds and
structured products, Elsinore aims to deliver attractive returns
within and across asset classes. €101 million has been raised
to date for this strategy.
Stada
• €2.4bn senior secured debt facilities to
support the acquisition of the business
by Bain and Cinven
Telenet
• €4.1bn senior secured debt facilities to
support the refinancing of the business
Nets
• €2.2bn senior secured debt facilities to
support the acquisition of the business by
Hellman & Friedman
Ineos
• Global chemical conglomerate
• €5.2bn senior secured debt facilities to
support the refinancing of the business
Euro Garages
• Leading European petrol forecourt operator
• €2.8bn senior secured debt facilities to
support acquisitions and the refinancing
of the business
Verisure
• Leading European provider of monitored
alarm solutions
• €3.0bn senior secured debt facilities to
support the refinancing of the business