DSCDM, which was previously owned by London-based private equity firm Duke Street Capital prior to being acquired by Babson Capital Management in May 2004, has been renamed Babson Capital Europe. Babson Capital Management is a member of MassMutual Financial Group, the US life insurer.
Babson Capital Europe will continue to specialise in CDOs (collateralised debt obligations) backed by leveraged loans and will invest in senior loans, mezzanine loans and buyout-related high yield bonds, mainly in Europe. It will invest the Duchess III fund, which closed on €450 million ($553 million) in July 2004, and has a total of €2 billion in funds under management.
DSCDM was founded in 2000 by Duke Street to establish a multi-fund debt management business. It closed its maiden CDO fund, Duchess I, on €750 million in June 2001 and then increased total commitments to €1 billion in February 2002 through a tap issue. The successor Duchess II fund closed on €550 million in April 2003 and was fully invested by December 2003.
Babson Capital Europe is retaining the same team that ran DSCDM. It is led by Ian Hazelton, who launched DSCDM in 2000 having been managing director of leveraged finance at Royal Bank of Scotland. The team also includes David Wilmot, former head of UK leveraged finance at Societe Generale, and Zak Summerscale, a former senior high yield bond manager at New Flag Asset Management.
Said Hazelton: “This change of name reflects the next chapter in the development of our business. The European leveraged loan market remains robust with low default characteristics, attractive pricing and continued growth in the supply of loans.”
Babson Capital Management, based in Massachusetts, manages approximately$84 billion for institutional and retail investors in the US and abroad, as well as high net worth individuals and family offices. The firm offers a range of different investment methods using equity, fixed income and derivative instruments.