New hires and company developments in the structured finance sector

Europe

Apollo Global Management has named Brigitte Posch md, head of emerging markets in London. She was previously global head of emerging markets corporate credit at Barings Asset Management.

Reed Smith has hired Kevin-Paul Deveau as a partner to its financial industry group in London. Deveau joins from Dechert and will focus on advising lenders, general partners, and fund managers on capital call.

ILS

Lutece Investment Management has hired Robert Jardin as head of portfolio analytics, working out of the firm’s Bermuda base. He was previously senior P&C actuarial analyst at Willis Towers Watson. It has also hired Cornell Fox as head of investor relations after having previously been at AlphaCat in corporate development. Fox will join BTG Pactual Asset Management and will continue to be based in Bermuda.

Lending Club founder fraud charge

The US SEC has charged LendingClub Asset Management (formerly Lending Club Advisors, LCA) and its former president, Renauld Leplanche, with fraud for improperly using fund money to benefit LendingClub Corporation, LCA’s parent company that Laplanche founded and for which he served as ceo.  LCA and Laplanche, along with Carrie Dolan, LCA’s former cfo, also were charged with improperly adjusting fund returns. All three have agreed to settle the agency’s charges against them and will pay more than US$4.2m in combined penalties.  The SEC also barred Laplanche from the securities industry. 

Partnerships

IFC and Demica have announced a partnership to unlock as much as US$9.8bn in annual financing for suppliers and distributors in emerging markets, particularly to SMEs. IFC also invested in Demica’s US$25m second round financing, alongside new investor Wyelands Capital and existing investors, JRJ Group, TOMS Capital, and 76 West Holdings.

US

Scott Eichel has joined Barclays as head of securitised products for the markets business. Prior to joining Barclays, Eichel was global co-head of MBS, CMBS and ABS trading and head of US flow credit trading at Natwest.

Cantor Commercial Real Estate has hired Darrel Wheeler as md of CMBS strategy. Before joining Cantor, Wheeler worked as md and head of structured finance research at S&P.

CIFC is expanding its distressed debt capabilities with the addition of four senior executives from Logen Asset Management, including Steven Gendal who will become head of distressed credit funds, having previously been a principal at Whippoorwill Associates. Ian Greenhaus and Abhishek Patwardhan also join CIFC as vps after working at Logen as senior analyst and vp, respectively. Finally, Nick Verma joins the firm as md of business development, after working as md and head of business development at Logen.

EquiFi Corporation has appointed Fred Matera as evp and cio. Matera will oversee EquiFi's capital markets development, securitisation, portfolio construction, and management services, and will be reporting to David Shapiro, EquiFi's founder and ceo. Matera was coo and cio at LendUS/RPM where he co-headed bank operations and was responsible for loan manufacturing processes and external capital raising.

Shrewsbury River Capital has hired Dan Voloshin as md to its investment team. He was previously head of the CMBS secondary trading desk at Deutsche Bank.

Gunther Stein has stepped down as cio and ceo of Symphony Asset Management, although he will stay on at Symphony as chairman until the end of 2018. His investment roles have been assumed by Scott Caraher, head of loans, James Kim, head of research, Jenny Rhee, head of high yield, and Himani Trivedi, head of structured credit. The four are now co-heads of investments and will report to Nuveen cio and head of global investments Jose Minaya.

CMBS approach updated

DBRS has updated its European CMBS rating and surveillance methodology, following the conclusion of its request for comment period. The changes reflect the reclassification of the agency’s large loan sizing hurdles from a predictive model to an analytical tool, the outputs of which will ultimately be used as a component to support the broader analysis conducted to determine a rating.

Investment firm fined

The US SEC has entered an order finding that former Putnam Investment Management portfolio manager Zachary Harrison prearranged with broker-dealers to temporarily sell RMBS and repurchase them at a small mark-up, usually the next business day. By executing the trades at the securities’ bid price instead of the midpoint between the bid and the ask price, as required by SEC rules, his trading had the effect of benefitting the client who purchased the crossed bond to the detriment of the client selling the bond. The SEC order also found that Putnam’s training and monitoring procedures related to cross-trading were inadequate and that it failed reasonably to supervise Harrison. Without admitting or denying the findings, Putnam agreed to reimburse approximately US$1.1m to its harmed clients and to pay a US$1m penalty, while Harrison agreed to pay a US$50,000 penalty and to a nine-month suspension from the securities industry.

Portfolio acquisitions

La Banque Postale has purchased a second loan portfolio comprising 4,600 Dutch mortgages worth around €780m from Rabobank. The loans were originated by Rabobank, which remains the client servicer, and all benefit from an NHG guarantee. The transaction enables La Banque Postale to invest its excess liquidity in an attractive guaranteed loan portfolio, originated by a leading counterpart.

UK Asset Resolution (UKAR) has concluded a competitive sales process for an £860m portfolio of approximately 6,200 UK equity release loans from the legacy books of NRAM, Bradford & Bingley and Mortgage Express to Rothesay Life. UKAR says the overall price achieved for the portfolio is at the “upper end” of the likely valuation range and the mortgages were sold for a price above their book value. No negative-equity guarantee (NNEG) protection is estimated to have adversely impacted the sale price by around £200m, but UKAR still expects to repay approximately £1bn of the government loan. Completion of the sale is expected within the next few weeks, at which point the interest rate swaps held against the mortgages will be terminated, the cost of which is anticipated to exceed the profit on the sale of the loans. The mortgages will continue to be administered by the same company (Computershare Loan Services), providing continuity of service.

Royal Commission interim report

The Australian Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry last week released its interim report, detailing numerous findings from its first six rounds of inquiries. Rather than setting out policy recommendations, the report outlines the circumstances that it believes enabled conduct and governance failures within the financial services industry. Moody’s expects residential mortgage lending underwriting practices will tighten further as a result, which could in turn constrain the availability of credit. The agency also anticipates that regulatory and compliance supervision will become more interventionist and more litigious, resulting in higher penalties than in the past, including significant penalties being recommended in the final report.

SPPI classification service

Moody’s Analytics has partnered with Thomson Reuters Financial and Risk business to offer a classification solution for conducting the solely for payment of principal and interest (SPPI) tests required under the IFRS 9 accounting standard (SCI 15 June). The solution allows fixed income investors to automate SPPI tests for securities in their portfolios by providing data on over 1.2 million corporate, government and structured securities globally. The SPPI data feed is delivered with an open API and can be integrated into an existing client system or accessed via a web portal.

UAE

Intertrust has opened a new office in Abu Dhabi, marking the firm’s second office in the UAE, with another based in Dubai. The new office is led by Patricia 't Hart-van Rooijen, md, UAE and will enable the firm to provide its clients with independent regulatory frameworks and a variety of legal structures including its special purpose vehicle (SPV).