This week we continue our conversation with Kevin Alexander, the deputy chief executive officer, Americas, and Michael Moravec, the head of investment banking, Americas, for Natixis. Natixis is the international corporate and investment banking, asset management, insurance and financial services arm of Groupe BPCE, the 2nd largest banking group in France. Second of two parts – View part one.
The Lead Left: Is there linkage to that CLO business for your leverage finance practice?
Kevin Alexander: It’s informal, but it gives us powerful data points. We are the fifth largest CLO originator in the US – we know who’s ramping. We can get a read on a complex second lien we’re looking to underwrite from our CLO clients. When we did the Tolt-Pomeroy deal, for example, that ~$240 million financing was fully distributed, thanks to our ability to see information better than some of the big banks. We’re competing to lead the $75 million ebitda transactions, not the jumbo ones.
TLL: It feels like you’ve come a long way in the last eighteen months.
Michael Moravec: Yes, besides Edith we recently hired Chris Briggs (Soc Gen/Morgan Stanley) and Matt Jackson (Deutsche) into sponsor coverage. In leveraged finance we’ve hired David Lynch from (20 year RBC/JP Morgan veteran), Kevin Emerson (UBS/Morgan Stanley) and Chris Dorsett (Deutsche/JP Morgan). We’ve also recently added Lori Harris (Deutsche/Moodys) to head up our Rating Advisory group. Plus we have two senior Jefferies folks on the syndicate desk, who I’m sure you know, Graham Lawrence and Tyler Lifton. The goal is to broadly have the infrastructure in place by year end.
KA: If anything, we’ve probably overinvested in distribution at the moment. But there are benefits to having the pipes and infrastructure. You need to feed those pipes. We’re focused on the $50 to $100 million ebitda space, so we’ll be seeing lead left business. And we’re finding synergies in our asset class expertise. For example, Spring Leaf acquiring One Main. We financed their receivables and helped with the bonds and securitization. Another was Apollo’s Diamond Resorts. They said, “We don’t really know you guys, but take a look at the ABS facility.” It was a time share securitization, so very specialized. We did $100 million of the total $300 million need. We think of our clients as partners. We’re honest about where we can help each other and where we can’t, and that builds a compounding level of trust that deepens our relationships.