Seth Vance, former head of collateralized debt obligations at Deutsche Bank in London, has joined Scottish Re--a Bermuda-based global life reinsurance specialist--as president and ceo of the Americas division. CDO professionals said Vance is ideally suited to the position because of his corporate experience--he was cfo and later coo at Koch Industries, one of the largest privately held companies in the U.S. In addition, they highlight his Wall Street knowledge derived from working at Morgan Stanley, Salomon Smith Barney and Deutsche Bank. He will report to Scott Willkomm, president, who did not return calls by press time.
A rival CDO head said Vance's knowledge of the CDO market can easily be transferred to his new role. "Reinsurance, is just risk participation," he noted, adding, "It's about taking on risk and shedding risk on a portfolio basis." A credit salesman for insurance companies said, "reinsurance companies live off excess spread, and that is the same as CDOs." He explained that reinsurance companies, especially those focused on life insurance, make money by ensuring liabilities, life insurance payouts in this case, are less than assets, normally corporate bonds, in the same way as a CDO. He added that operational costs are also vital to reinsurance companies and Vance's experience as cfo and coo at Koch may be the reason he made the switch.
Former colleagues predicted that Vance will settle in well because he is known as a man manager and 'jack-of-all trades,' rather than a product specialist.
