Sixth Street Launches Structured Products Business

Sixth Avenue, the $60 billion choices manager, has released a structured goods business.

The company has tapped Michael Dryden, who earlier was worldwide head of securitized items finance at Credit history Suisse, to operate the division. The team will concentration on investments as nicely as origination throughout commercial and household mortgages, renewables and energy finance, infrastructure debt, and other structured products, in accordance to the business.

The enlargement arrives as Sixth Street has been raising its insurance plan assets. Structured products and solutions present the variety of chance-return profile that insurance coverage companies like. These products are generally larger-rated belongings that create a little extra yield than expense-grade company and authorities bonds. At the exact same time, they are considerably significantly less dangerous than non-public fairness and other alternate options. 

As II noted in December 2021, Allianz Lifestyle and Sixth Road entered into a reinsurance settlement with Sixth Street’s portfolio business Talcott and husband or wife Resolution Lifestyle. The deal was Sixth Street’s 2nd significant insurance plan offer final yr. Before this yr, Sixth Road introduced a $25 billion reinsurance transaction amongst an affiliate of Talcott Resolution and Principal Financial Team. Possibilities firms have been likely soon after insurance policy property as a source of long term money. 

The freshly fashioned structured solution division will “benefit from the understanding, means, and ALM (asset/liability administration) capabilities” that Talcott Resolution features, in accordance to Sixth Road. 

“Our thematic investing technique, deep underwriting knowledge, and growing insurance policies cash foundation will all help push the expansion of our presence in structured finance markets,” stated Michael Muscolino, co-founder and lover, in a statement.

This move follows Blackstone’s November announcement of its structured finance team, which introduced jointly the firm’s real estate credit card debt techniques and other asset-backed funding investments. Blackstone expanded the firm’s structured finance business in section to manage the “increasing amounts of coverage capital” that Blackstone has been deploying. 

“We appear forward to using the deep asset funding and structuring expertise that by now exists throughout the firm to bring new offerings and capabilities to the corporations and establishments with which Sixth Street companions,” extra Dryden, in the assertion. 

Credit Suisse hired Dryden and other ex-Barclays executives in 2011. Right before Credit Suisse, Dryden labored for Barclays Capital’s securitized products and solutions origination team.