Hedge funds looking for CLO originators

US hedge funds are looking for bankers who can originate collateralised loan obligations, says one recruiter.

"The collateralised loan side of things is a big area right now," says Chris Sevenoaks, a consultant at recruitment firm Finance Professionals. "A lot of US hedge funds are building a bridgehead in Europe."

Collateralised loan obligations (CLOs) are securities backed by pools of leveraged loans. Traditionally dominated by banks, increased private equity buyout activity has attracted the attention of hedge funds.

Sevenoaks says funds are particularly keen on recruiting German speaking originators: "Germany, Austria and Switzerland account for about 25% of established European CLO market, and hedge funds are keen to capitalise on that."

London-based hedge fund CQS brought a debut CLO via Morgan Stanley in May. Halcyon Asset Management, a US-based hedge fund with a London office, hired Ross Smead to head a new business unit focused on collateralised loan obligations in May, before going on to launch a debut European CLO in June.