(Bloomberg) -- Money manager Anthelion Capital Partners had an unusually concentrated position in loans of now-bankrupt car-parts supplier First Brands, a blow for an investor that had touted the ability of its AI-driven platform to pick up on subtle market signals.
Anthelion, as of last month, owned about $5 million of First Brands debt as part of a roughly $400 million investment vehicle known as a collateralized loan obligation, according to people familiar with the matter. Since then, the company has fully sold out of its position in First Brands' debt, the people said.
The percentage of the CLO's loan portfolio that First Brands' debt represents — 1.29% — is the highest out of CLOs printed in 2025, according to an analysis by CLO analytics firm Valitana, which compiled the latest available deal data as of September. Valitana's analysis focused on broadly syndicated CLOs, which are vehicles backed by pools of leveraged loans.
Anthelion co-founder Vusal Najafov declined to comment.
While Anthelion's First Brands exposure is dwarfed by other creditors, the firm's investment speaks to how pervasive the company's debt became across Wall Street before its collapse into bankruptcy last month.
Anthelion has heavily promoted the ability of its artificial intelligence platform to detect market signals other investors may miss. The firm's use of large language models allows it to scour data such as companies' customers and suppliers, among other areas, co-founders Najafov and Ewa Kozicz told Bloomberg in July. In retrospect, Anthelion's appetite for the car-parts supplier's debt underscores that artificial intelligence is hardly infallible.
That said, other investors sank more money into First Brands' debt. Point Bonita Capital, an asset manager controlled by a unit of Jefferies Financial Group, had about $715 million invested in company receivables.
Overall CLO exposure is "manageable," Morgan Stanley analysts wrote in a note late last month. Of the group of managers that Morgan Stanley analyzed, which did not include Anthelion, just 13% of them had First Brands exposure above 1%. In the US, the overall exposure to First Brands within CLOs was 0.21%, the note said. The CLO market is a roughly $1 trillion arena.
Anthelion started selling out of its First Brands debt at levels at or above 90 cents on the dollar and an average between roughly 70 cents and 90 cents, people said. That helped them avoid taking deep losses that some of First Brands' other creditors are now facing.
Still, those sales would have crystallized losses early in the life of the CLO, which the firm issued only in June. CLOs have investment periods lasting several years. Anthelion plans to issue about five CLOs per year, its co-founders told Bloomberg in July.
--With assistance from Aaron Weinman and Paula Seligson.
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