Now that financial services company Clayton Services, Inc. and credit risk management firm The Murrayhill Co. have merged to form Clayton Holdings, Inc., the combined entity will look to make a push into the CDO sector, according to its new chief executive.

Frank Filipps will serve as the chairman and chief executive officer of Clayton Holdings after he retires from his current position as CEO at Radian Group, Inc., scheduled to take place in June.

Clayton will be "looking at expanding [into new] asset classes," said Filipps. "Especially the CDO market, which is probably the most rapidly growing market, is one area that we're going to devote a lot of resources to."

"We expect [the combined entity] will be able to provide the same level of value-added to the clients, as we currently offer in the MBS market."

As Clayton Holdings looks to move into the world of CDOs and expand its business in the credit risk management side, the company also plans to spread its horizons overseas, primarily in Europe, added Filipps. Although the U.K. has a relatively active securitization marketplace, Filipps noted other capital markets throughout Europe are also beginning to develop rapidly. Clayton Holdings will be looking at broadening its operations to Germany, Italy and perhaps Spain, said Filipps.

There is room for global expansion, according to Fillipps, as the services that Clayton and Murrayhill offer seem to be lacking in international markets. "As the international ABS and MBS capital markets develop and as the investors continue to look at investment opportunities there, [the markets] are naturally going to look to have this kind of data," he said.

Clayton Holdings will seize these opportunities and look to match the growth in those international markets, said Filipps.

By coming together, the two companies see benefits, not only for themselves, but for their clients as well, noted Steve Lamando, former CEO of Clayton Services and current president of Clayton Holdings.

"I think we'll be able to offer more of an end-to-end solution that makes our clients' lives easier," he said. "We can offer more value as a collective combined entity."

The main synergy that Clayton Services and Murrayhill hopes will develop is the ubiquity of data, said Sue Ellis, founder of Murrayhill and a member of the board of directors at Clayton Holdings. There is overlap between the data that Clayton collects on the front end and the data the credit risk function works with after a securitization is closed, she said.

"A push I have for this company is to make it more analytical, in other words, to tap into that database," said Ellis. "By using the synergies between the two firms, [we should] be able to put our heads together and do something more with the data for the clients' benefit," she added.

The company does not intend to reduce its staff, said Ellis. In fact, the new company plans to expand its employee base significantly. Currently, the firm is actively hiring and will continue to do so, added Lamando. So far this year, the company has expanded its California offices and opened two offices in Indianapolis and Tampa, he added.

"Our employees see opportunity here because now they have a place to transfer to if their career interest focus changes," noted Ellis. "By forming the holding company and being in expansive mode there are more promotion and leadership opportunities."

Copyright 2005 Thomson Media Inc. All Rights Reserved.

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