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Derivatives

CDO Manager Of The Year

 Matthew
Natcharian

Babson Capital Babson's structured credit business, run by Matthew Natcharian, oversees credit derivative product company Invicta Credit, which launched this year and sells long-dated protection on credit rated AA and higher. Babson closed its first four-currency collateralized debt obligation late last year and has come on in leaps and bounds since closing Avon Ridge, its first synthetic investment-grade CDO that same year, according to market participants. "They will be managing CDOs in five, 10 years," one predicted, lauding the Boston-based firm's "very deep credit research." The firm, with some USD96 billion under management, distributes globally and markets CDOs throughout Asia and Europe as well as in the U.S.

 

 Ron D'Vari

BlackRock BlackRock's global brand name and strong distribution mark the firm as a leader in the collateralized debt obligation sector. Under portfolio managers Ron D'Vari and Andrew Yorks, investors characterize the CDO manager as experienced, strong in credit, and a tough negotiator. The New York firm, with USD1.23 trillion in assets, structured a number of notable deals this year, including its first hybrid investment-grade CDO--called Valleriite CDO 1--which consisted of U.S. dollar- and euro-denominated notes backed by separate collateral and independent asset portfolios.

 

Cheyne Capital

Cheyne Capital stands out in the area of target-redemption notes, which provide investors with AAA-rated principal and coupon with upside participation linked to synthetic collateralized debt obligation equity. One investor said the structures are particularly attractive because they're more stable than rated equity and not dependent on a model for rating. The London-based hedge fund manager--with USD13 billion under management--was called very clever and choosy about its deals, with one dealer saying Cheyne is his first stop for reverse enquiries. A feather in Cheyne's cap this year was the hiring of portfolio manager Patrick Vickers from Goldman Sachs in New York, where he was a single-name credit trader.

 

 David
Littlewood

Cairn Capital London's Cairn Capital, run by principals Tim Frost, David Littlewood and Robert Pierce Jones, set its sights on Asia this year, making a formal push into the Japanese market. The credit management firm said Japan is better value than North America because investors are increasingly open to synthetic credit products and the management landscape there is less crowded. Cairn completed two deals that earned praise for innovation from investors: its first managed investment-grade rated equity tranche, called Derwent, and its Cairn Constant Proportion Debt Obligation completed with JPMorgan, also a first for the firm. Cairn has USD30 billion under management.

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