Four Corners Capital Management is trying to reinvent itself after failing to cut it as an issuer of collateralized loan obligations.<\/p>\n
The Los Angeles money manager is currently working on a mutual fund that would buy the same junk-rated bank loans that it initially targeted as CLO collateral. At the same time, the recently downsized outfit has stepped up efforts to find a third-party investor to step in if Macquarie Bank withdraws its backing in the near future. Among the names being mentioned is financier Michael Milken.<\/p>\n
Macquarie pledged $26 million to fund the creation of Four Corners in September 2001. Word has it that Four Corners is now under the gun to find another backer because Macquarie has been trying to scale back its commitment over the last several months – mainly because Four Corners never completed the CLOs that it initially set out to issue. Four Corners will have used all the cash from Macquarie by September, a source said.<\/p>\n
Four Corners founder Michael McAdams denies that Macquarie is pulling out. “My people are in Australia working with some investment-fund folks [at Macquarie], so I find that hard to believe,” he said.<\/p>\n
McAdams noted that Four Corners is in the process of raising money for its planned mutual fund, called Four Corners\/Claymore Corporate High Income Portfolio. “We’re still 100% focused on non- investment-grade bank loans,” he said. “It doesn’t matter whether it’s through a CDO, a hedge fund or something else.”<\/p>\n
In the meantime, Four Corners has established an arrangement with Wachovia to pay back a credit line from CIBC World Markets. Four Corners used the line to purchase $110 million of loans for its CLO effort, which was shelved after CIBC tried marketing it for several months last year.<\/p>\n
Market players said the deal failed because investors were concerned about Four Corners’ lack of experience and lingering questions about the underlying collateral. Since December, the firm has weathered a number of layoffs, departures and pay cuts among its senior staffers.<\/p>\n
Copyright HARRISON SCOTT PUBLICATIONS Jul 4, 2003<\/p>\n","protected":false},"excerpt":{"rendered":"
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