Bloomberg News

Sound Harbor Partners Hires Ex-Blackstone CLO Head Criares

January 08, 2013

Sound Harbor Partners Co-Founder Michael Zupon

Dean Criares, former senior managing director at Blackstone Group LP, oversees the investment process, strategy and direction of the unit, and is based in New York, according to Michael Zupon, Sound Harbor co-founder. Source: 85photo via Bloomberg

Sound Harbor Partners LLC hired Dean Criares, former senior managing director at Blackstone Group LP (BX:US), to head the firm’s new loan-fund business.

Criares, 49, oversees the investment process, strategy and direction of the unit, and is based in New York, according to Michael Zupon, Sound Harbor co-founder.

Sound Harbor took over management of more than $1 billion of collateralized loan obligation contracts from Aladdin Capital Holdings LLC last year, entering a market that saw volume more than quadruple from 2011. At least 12 new managers issued CLOs for the first time in 2012, according to Royal Bank of Scotland Group Plc data. The funds, which back mergers and leveraged buyouts, attracted investors with better yields than similar- rated debt.

“Dean and I have known each other for 25 years and worked together closely at CIBC prior to his starting Blackstone’s CLO business,” Zupon said in a telephone interview. “He is extremely well known and well regarded in the market, and brings enormous talent and investment acumen to the firm.”

Sound Harbor completed its acquisition of CLO management contracts from Aladdin on Dec. 31. The funds are overseen by portfolio managers William Lutkins and Thomas “Ned” Bancroft.

Sound Harbor was started in 2009 by Zupon, Carlyle Group LP (CG:US)’s former U.S. leveraged-finance division head, and Michael Cerminaro, a former managing director at BlackRock Inc. (BLK:US)

CLO Prices

The New York-based firm makes $10 million to $50 million in individual investments in middle-market businesses, according to its website.

CLOs are a type of collateralized debt obligation that pool high-yield, high risk loans and slice them into securities of varying risk and return.

Last year $52.2 billion of CLOs backed by widely syndicated loans were issued, compared with $91.1 billion at the peak of the market in 2007, according to data compiled by Bloomberg and Morgan Stanley.

The price of AAA CLO debt rose 5.7 percent in 2012. Prices improved to 97 cents on the dollar Nov. 29, the highest level since November 2007, according to Morgan Stanley data.

The highest-rated portions of CLOs were paying a rate of 140 basis points more than the London interbank offered rate Nov. 8, compared with 26 basis points for similarly-rated credit-card debt, according to Morgan Stanley data.

Libor is a rate at which banks say they can borrow in dollars from each other. A basis point is 0.01 percentage point.

To contact the reporter on this story: Kristen Haunss in New York at khaunss@bloomberg.net

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net


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Companies Mentioned

  • BX
    (Blackstone Group LP/The)
    • $32.27 USD
    • 0.01
    • 0.03%
  • CG
    (Carlyle Group LP/The)
    • $33.21 USD
    • 0.36
    • 1.08%
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