Tullett moves into bankruptcy secondaries

The interdealer broker's alternatives arm is now trading more than just LP fund stakes. Bankruptcy claims are a 'natural progression in this sphere', says Tullet's Dan Nolan.

The alternative investments arm of Tullett Prebon, the London-based interdealer brokerage firm, has said it’s now prepared to broker bankruptcy claims on the secondaries market.

“Bankruptcy claims is a natural progression in this sphere. The market has existed in one form or another since way before the financial crisis,” Dan Nolan, senior broker at Tullett Prebon Alternatives, tells Secondaries Investor. “Since the crisis, the amount of exposure people have to these assets has been heightened.”

Tullett’s team has thus far overseen a two-stage auction process for a claim of more than £150 million, according to a statement.

Nolan says it will approach this new area for secondaries “as we have done with hedge funds and private equity…For us it’s a market that is ripe for that next step in terms of removing some of the complications. There’s no buying it ourselves and selling it on, or flipping or back-to-backing. The buyer will pay us a commission separately but with us what you see is what you get.”

Tullett has in the past sought to distance itself from other secondaries advisory firms that provide valuation services or get involved in negotiations between buyers and sellers, focusing primarily on matching buyers and sellers in the way one would trade any public security.

Known primarily as a Forex house, the interdealer broker was founded in 1971 and has its headquarters in London with offices in New Jersey, Singapore, Hong Kong and Tokyo and affiliated operations in 23 countries.