By Giles Turner
Bond giant Pimco has raised $5.5 billion to buy bank assets in
the U.S. and Europe and has closed the fund to new investors,
according to a person familiar with the fundraising.
The Bank Recapitalization and Value Opportunities II fund, or
Bravo II, is being led by deputy chief investment officer Dan
Ivascyn and will target a range of unwanted assets on the balance
sheets of banks, including residential and commercial real-estate
assets.
Investors are lining up to snap up the unwanted loan portfolios
and real-estate assets. Many of the targets lie in Europe, where
banks have been busy shrinking their balance sheets primarily to
meet stricter capital requirements.
Last month, The Wall Street Journal reported that two of Italy's
biggest banks, Intesa Sanpaolo SpA and UniCredit SpA, were in talks
with U.S. private-equity firm KKR regarding the sale of some of
their restructured loans.
Commerzbank said in February that it had sold EUR710 million of
Spanish commercial real-estate loans to investors. In the U.K. late
last year, the Royal Bank of Scotland sold its first portfolio of
U.K. commercial property assets to hedge fund Varde Partners, and
in August, Spain's 'bad bank'--set up to house assets from the
country's bailed out banks--sold its first real-estate assets to
private equity group HIG.
California-based Pimco, traditionally a bond-house and home to
the world's largest mutual fund, has been busy diversifying in
recent years. Bravo II follows the $2.4 billion raised for Bravo I
in 2011.
Pimco's new Chief Executive Douglas Hodge told Financial News
last month that he wants to broaden the firm's equity expertise,
including backing the hiring of teams by equity chief Virginie
Maisonneuve. The firm offers products in derivatives, multi-asset,
real estate, private equity, real return and emerging markets, but
is still 90% exposed to fixed income.
Mr. Ivascyn, previously a credit and mortgages specialist, was
promoted to the deputy CIO role in mid-January following the
unexpected departure of chief executive Mohamed El-Erian, whose
exit left Bill Gross, who founded Pimco in 1971, as sole chief
investment officer.
Andrew Balls, head of European portfolio management; Mark
Kiesel, head of Pimco's corporate bonds group; Scott Mather, head
of global portfolio management; Mihir Worah, a former
particle-physicist who heads up Pimco's real-return portfolio
management team; and Ms. Maisonneuve, were also promoted to the
deputy CIO role.
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