Asian Boutique Eyes European
Philip Georgiadis Updated April 17 2018
A Hong Kong-based fixed-income boutique has its sights set on further growth in Europe after acquiring the controlling stake of an Italian bank.
SC Lowy, set up in 2009 by a team of former Deutsche Bank traders, said on Tuesday that it paid €50 million for the stake in Italian regional player Credito di Romagna.
The investment banking boutique has expanded markedly since its launch and now has offices in London, Milan and Seoul.
Debt-veteran Michel Lowy, founder and CEO, said the firm has plans to expand in Europe once its latest acquisition has settled in.
“My expectation is that in the next couple of years we will add staff in London and Milan, and over time have much more business in Europe than we do in Asia,” Lowy said in an interview.
2019 could be the inflection point that the size of our business in Europe overtakes Asia.
Michel Lowy CEO, SC Lowy
The firm had total European trading volumes of around $10 billion in 2017, and Lowy said further acquisitions “could be useful”, although he doesn’t expect any in the short term.
The firm began by specialising in the secondary loans and high-yield bonds market, but has since also become active in the primary debt markets, and has carried out transactions of over $65 billion since inception.
The bank currently has 20 staff in London, dealing in high yield bonds and stressed and distressed loans. It expects to grow that team with hires in sales and trading, origination and research.
Lowy added that while the Italian deal was not a response to Brexit, and the ensuing regulatory uncertainty surrounding the UK’s exit from the EU, it has provided the company with a useful contingency plan.
“It is a hedge we built for ourselves by having a real presence in Europe,” he said.