Peltz's Trian Is Eying Debt Fund, Sources Say
05/09/08 - 06:44 AM EDT
Dan Freed
Funds that invest in troubled debt securities are all the rage at the moment among private equity investors and hedge funds. These investors are looking to take advantage of banks' eagerness to unload loans and bonds they underwrote to finance the leveraged buyout boom.
In a conference call with investors Wednesday, Bill Winters, co-head of JPMorgan Chase's(JPM Quote - Cramer on JPM - Stock Picks) investment banking business, estimated banks still have $150 billion worth of buyout commitments they want to move off their balance sheets, having already sold $150 billion. Hiring a fund manager such as Millison would enable Peltz to buy into these loans, which are on sale at the moment due to oversupply and concerns over the economy. Buyout firms such as The Blackstone Group(BX Quote - Cramer on BX - Stock Picks) and Apollo Management have already been in the market buying these distressed loans from the banks. According to reports last month, banks including Deutsche Bank(DB Quote - Cramer on DB - Stock Picks) and Citigroup(C Quote - Cramer on C - Stock Picks) were in discussions with those firms, among others, as they work to unload the debt. Trimaran Advisors is one of two business lines that comprise Trimaran Capital Management. The other unit, Trimaran Fund Management, has managed middle market private equity funds for 20 years under three different names. Trimaran Capital Management's two managing partners, Kehler and Jay Bloom, like Millison, are former Drexel executives. Bloom was more closely involved with the debt business than Kehler, says an executive familiar with the firm. Bloom also declined all comment, and it could not be learned whether they will join Millison, or what will happen to the private equity business. Trimaran's latest private equity fund is fully invested, but the firm has not begun raising a new fund, says the executive familiar with Trimaran.
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