An investment vehicle that is expected to be listed on the New York Stock Exchange is to be managed by an affiliate of long-time private equity firm Thomas H. Lee Partners.
The sponsor is Four Wood Capital Advisors, a firm recently founded by Steve Baffico, formerly of Guggenheim Partners, and Peter Pisapia, formerly of BlackRock. Four Wood hired the Thomas H. Lee affiliate as sub-adviser.
The fund will invest primarily in secured bank loans, acquired directly from bank syndications as well as in the secondary market. Because these loans have floating interest rates, the risk of loss due to rising rates is less than it would be for fixed-income bonds. Hence the uncertainty caused by the Federal Reserve’s plan to taper off its bond purchases is a lesser issue.
However, around 20% of the assets may be invested in other credit instruments, including convertible bonds and collateralized loan obligations. The sub-adviser will allocate the portfolio between loans and other debt securities depending on the market outlook.
Tags: Banks, BlackRock, Four Wood Capital Advisors, Guggenheim Partners, Loans, NYSE, Thomas H. Lee Partners
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