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Barclays seeks third party for CLO portfolio

BARCLAYS will look to a third party if it sells &pound;4bn worth of Collateralised Loan Obligations (CLOs), analysts said yesterday.<br /><br />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.<br /><br />Several analysts said yesterday&nbsp; 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.<br /><br />A sale would be a different strategy to the bank&rsquo;s recent move to spin off a &pound;12.3bn asset portfolio dubbed Protium, managed by C12, a firm staffed by former Barclays employees.<br /><br />Simon Willis of stockbroker NCB said: &ldquo;It&rsquo;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.&rdquo;<br /><br />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.<br /><br />JP Morgan Chase is a potential buyer for the CLOs, having bought similar portfolios recently.