Barclays seeks third party for CLO portfolio
BARCLAYS will look to a third party if it sells £4bn worth of Collateralised Loan Obligations (CLOs), analysts said yesterday.
The bank is understood to be weighing up a plan to rid itself of the CLOs in a bid to calm investors worried by the risky nature of the investments and remove the potentially volatile instruments from its balance sheet.
Several analysts said yesterday that the bank was likely to sell the assets to a third party, rather than hiving them off into a separate company managed by staff.
A sale would be a different strategy to the bank’s recent move to spin off a £12.3bn asset portfolio dubbed Protium, managed by C12, a firm staffed by former Barclays employees.
Simon Willis of stockbroker NCB said: “It’s likely that the assets will go to a third party. It allows them to move those assets away from mark-to-market accounting, taking volatility out of their profit and loss account.”
Willis said the Protium deal had left Barclays with exposure to the possible collapse of the fund, whereas a sale would not carry the same risk.
JP Morgan Chase is a potential buyer for the CLOs, having bought similar portfolios recently.