SC Lowy posts record growth on international expansion and market share gains
Hong Kong – 20 October 2015 – SC Lowy, a fixed-income specialist, announced today another year of exceptional growth with trading volumes reaching a record ~US$7.5 billion, an increase of ~50% on 2014.
Growth was primarily driven by an expanded presence in Europe and continued market share gains as trading volumes in high-yield bonds and secondary loans grew in excess of 50% and 20% respectively.
This performance in our sixth year was particularly satisfying as we realized the benefits of our investment in talent and broadened geographical footprint. Our business is increasingly global with Asia Pacific, EMEA and the US accounting for 46%, 27% and 27% respectively of trading volumes.
This reflects the development of our franchise to become a market leader in secondary loan trading in Asia, the Middle East, Australia, and a top-five Asian high-yield bond trader. In addition our expansion into Europe with full research capability allowed us to quickly gain a leading position in secondary loans.
“The past year’s growth has further validated our model as an independent investment bank and alternative to “bulge-bracket banks” as we win market share and prove to clients that we are a partner for the long term,” says co-founder and CEO Michel Löwy.
“In a year of exceptional volatility and a shakeout in market liquidity, bond investors have faced a much more challenging environment to generate returns,” he added.
“As markets have become more driven by fundamentals, this has played to our advantage where the value of having a deep research bench and financial flexibility becomes a key differentiator. This is underlined by the fact that we have continued to make markets and invest for future growth at a time when various competitors have either retrenched or exited the industry.”
2015 was also a period of considerable investment for future growth with key hires and new business development. In February Florian Schmidt was appointed in Hong Kong to spearhead expansion of global DCM business, covering both public bond and private special situations, while in London Hussein Nasser was appointed head of European Bond trading.
It is a testament to the firm’s progress to date that it has been able to attract top tier industry talent.
“The quality of the leadership team assembled at SC Lowy brings with it banking expertise and relationships built up over decades and a strong foundation for future growth,” says Lowy. “We now have a franchise that enables us to compete at the highest level globally in our industry. There is no doubt in today’s marketplace our size and independence is the right model for our clients, employees and shareholders to prosper.”
Our global reach and service offering has also been strengthened. Choeun Savings Bank, acquired by SC Lowy in 2014 further consolidated its market position with the acquisition of financial service provider Golden Bridge. The fixed-income offering has also recently been augmented with the launch of a new par loan trading business to tap into the growth of the secondary loan market in Asia.
Going forward there is considerable optimism about growth prospects in the current market. “Falls in commodity prices, currencies and slower China growth mean various industries are facing increased distress leading to rising default risks,” says Löwy. “This will lead to more opportunities for debt restructuring and consolidation and we also expect to see greater activity return to the Asian secondary loan market. With our strong balance sheet and nimble operating structure, SC Lowy is ready to deploy capital intelligently where we see opportunity.“