Laura Schwartz, senior managing director of ACA Capital and chief operating officer of ACA Management, responsible for the company's CDO asset management platform, has left the firm, according to market sources. Calls to Schwartz were not immediately returned, but her biography was taken down from the company's Web site. A spokesman for the company could not immediately confirm rumors about Schwartz's departure. Before ACA Capital, Schwartz was a director in the asset-backed finance group at Merrill Lynch. She was also a director in the global real estate finance group, responsible for origination of CMBS and RMBS outside of the U.S., primarily in Canada and Latin America. She began her career as a senior analyst in the commercial mortgage loan group at New York Life Insurance.
Guy Carpenter & Co., a risk and reinsurance specialist changed the name of its securities arm MMC Securities to GC Securities, in line with plans to expand its investment banking business in Europe, the company said. It appointed Christopher McGhee as its managing director in North America. In Europe, Mark Hewett will be managing director and oversee its operations there.
Derivative Fitch launched RAP CD v2.0 last week, its newest version of the CDO pricing and market risk analytics platform. A new addition to the platform is the inclusion of user-defined 3-D scenario stress testing, Fitch said, which enables users to gauge the impact on portfolio market values derived from any combination of stress movements, correlation changes and default rates. RAP CD is a Microsoft Excel-based trade interface allowing trade capture for new trades and substitution analysis for existing trades. The platform also allows users to analyze trades prior to execution while at the same time structuring these transactions. The platform also offers full support for hedge trades. Two versions of RAP CD were released, including RAP CD Investor and Rap CD Professional, which targets CDO managers.
Clayton Holdings, an information-based analytics, consulting and outsourced services firm, announced a new risk mitigation platform called Clarity. The program will score individual loans and the overall portfolio for credit, compliance, collateral and estimated loss risk. Best-of-breed, third-party data and technology can also be integrated into the process to assess collateral and fraud risk, the company said. The platform also offers clients summary dashboards that quantify the initial level of risk in a given portfolio and then track how it is mitigated during the due diligence process, Clayton said. Loan-level information generated through Clarity can be incorporated into Clayton's Surveillance databases, and used to update its originator and broker scorecards to improve its fraud detection screens, the company said. Clarity can also be linked to Clayton's Special Servicing unit, which the company expects to improve the servicing of scratch-and-dent' portfolios.
The Mortgage Bankers Association elected its Board of Directors for the 2007 to 2008 membership year. The Board consists of 21 members, three of which are from the commercial real estate/multifamily finance board of governors and six of which are from the residential/single-family board of governors. The board of directors will be chaired by MBA Chairman Kieran P. Quinn, CMB, chairman of Column Financial. The seven newly elected members of MBA's board of Directors are: Paul E. Bibb, Jr., National City Mortgage Co. in Miamisburg, Ohio; Phillip W. Bracken, Wells Fargo Home Mortgage in Ellisville, Mo.; Robert D. Broeksmit, CMB Chevy Chase Bank in Bethesda, Md.; William Cosgrove, CMB, Union National Mortgage Co. in Strongsville, Ohio; Samuel B. Morelli, CMB, Eagle National Bank, mortgage division in Chadds Ford, Pa.; David A. Roberts, CMB, Collateral Real Estate Capital in Birmingham, Ala.; and Richard H. Wohl, CMB, IndyMac Bank in Pasadena, Calif.
Amid the current crisis in structured credit markets, some firms are making hedge funds while the sun shines, particularly those asset managers looking to capitalize on all the distressed debt floating around. There has especially been opportunity in the market for hard-to-value CDOs. BlueMountain Capital Management, for one, has recently christened two new portfolios to capitalize on structured credit woes, including an $80 million closed-end portfolio known as the Correlation Relative Value II Fund. This one is the firm's third fund dedicated to credit correlation trading, and its lock-up period is 6.5 years. The other two are the Timberline fund and the Correlation Relative Value I, the latter of which the company says has grown 34% annualized since its launch 20 months ago. In May, the firm also launched a portfolio that invests in residential mortgage-backed securities and derivatives. BlueMountain says it now sees opportunities here, even as the financial industry continues to be bruised in this space, suffering massive write-downs and the collapse of hedge funds. Bryce Markus, a portfolio manager and managing principal at BlueMountain, says there is excellent value in the synthetic CDO market with all the volatility in senior and super tranche pricing and the rating and regulatory uncertainty.
Lone Star Funds completed its $296 million acquisition of San Diego-based Accredited Home Lenders Holding Co. on Oct. 12. The Dallas private equity firm bought all tendered shares of common stock for Accredited, worth $11.75 in cash per share without interest. The deal gave Accredited a $100 million cash infusion and the company re-started its previously suspended lending operations. Accredited believes that it can resume lending operations in a manner that will be beneficial over the long term, the company said in a statement. The subprime lender had stopped its lending business in September and laid off two-thirds of its workforce. Accredited sued Lone Star this past summer after the latter reneged on an earlier agreement to purchase the lender for $400 million. With the new cash infusion, Accredited has agreed to pay back a $230 million loan to San Francisco hedge fund Farallon Capital Management. Six members of Accredited's board resigned, and Lone Star appointed six new members. James Berglund, Gary Erickson, Bowers Espy, Jody Gunderson, Richard Pratt and Stephen Wall were the members that tendered their resignations. The new additions to the board are Len Allen, Michael Thompson, Marc Lipshy, Catharon Miller, Leigh Rea and Benjamin Velvin. Two directors of Accredited's board, James Konrath and Joseph Lydon, remain.
Dresdner Kleinwort has made six new hires in its equity and credit derivatives business in the past week in a bid to restructure the team. Ed Selby has been appointed as director and head of credit exotics at Dresdner Kleinwort and will directly report to Neil Walker, head of credit trading. He moves from Barclays Capital as a senior trader of synthetic CDOs. Michael Coats joins as director of credit exotics, reporting directly to Selby. He joins from Merrill Lynch, where he traded CDOs. David Richard has recently left Bear Stearns and joins as the director in the Equity Delta One division, which trades stock futures, options and equity swaps rather than buying stocks directly. He reports to Ulrich Schlumberger, head of Equity Delta One at Dresdner Kleinwort. On the technological side of the equity and derivatives team, Dresdner Kleinwort has appointed Steven Price as the director and head of business technology, reporting to Richard West, head of infrastructure, equity and credit derivatives. He has left Commerzbank after six years, where he recently implemented a system for trading equity derivatives exotics.
Dresdner also reshuffled two people within the equities and credit derivative team, adding Tony Main as the co-head of structuring and product development alongside Martin Hartmann. Maxime Malaure will join as managing director and head of cash CDOs this week, replacing Maurizio Raffone who has returned to the Dresdner Kleinwort Tokyo office to resume his post in its Asian CDO business.
Morgan Stanley is the latest firm to take a hit from the credit crisis, as it was reported on Oct. 17 that it was cutting 300 jobs from its institutional securities division. Most of the job cuts were in mortgage-backed securities, collateralized debt obligations and fixed-income trading, according to reports. The cuts came in response to a 3% drop in third-quarter revenue from fixed income. About 200 of the jobs that were slashed are from the U.S. division and the rest are in Europe. David Warren, Morgan's global head of structured credit trading, was reportedly one of those let go.
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