Las Vegas - Cohen & Co. last week announced it had snagged Taro Masuyama, the former head of Asia Pacific and Japan structured credit products at Merrill Lynch, to head up its new asset management business in the Asian-Pacific region, Cohen Asia. During Masuyama's seven-year tenure at Merrill, he oversaw the investment bank's CDO business in the region, which originated both cash and synthetic CDOs backed by Japanese and other Asian assets.
Cohen has opened offices in Japan, Hong Kong and Singapore. "We see great potential for CDO asset management in Asia, and we believe that there is demand for an asset manager with the product and servicing offerings and track record for value creation that we possess," said Chris Ricciardi, Cohen's chief executive. Cohen is planning more hires for the shop, but declined to say whether there were other hires in addition to Masuyama.
Growth within European and Asian markets is expected to be one of the main drivers of volume this year, according to participants at last week's ASF 2007 conference held here. In particular, the introduction of structured finance technology to non-Japan Asia is garnering the attention of a number of participants in the CDO sector.
"I think Asia is one of the biggest areas for growth in our market," said Richard D'Albert, a managing director at Deutsche Bank Securities, speaking during Monday's opening session at the ASF conference. "There is greater potential for growth and introduction of structured finance technology there than anywhere else in the world."
Balance-sheet CLO issuance is expected throughout Asia this year, as regional banks seek to transfer corporate credit risk from their portfolios in response to Basel II, according to Fitch Ratings. The trend of a greater portion of initial portfolios backed by Asia-Pacific collateral is likely to continue, the rating agency added in a recent report on the sector.
As far as China goes, while the U.S. is expecting more investors out of the region, CDO issuance there is largely hindered by regulatory constraints. China's first CDO was issued in the end of 2005, after years of preparation. China Development Bank launched the deal, as the first of two pilot securitization programs. China Development Bank 2005-1 CLO was Chinese-yuan denominated and backed by a pool of loans originated and serviced by CDB.
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