Unlike its U.S. sister operation, which has issued five asset-backed collateralized debt obligations, ING's European prop desk has only dabbled in structured finance, but the firm is now aiming to replicate its U.S. success. Ehlert said he has been given a broad mandate to invest in the gamut of asset- and mortgage-backed securities across the capital structure. The prop desk already invests in a wide array of other fixed-income securities, including distressed debt.
Ehlert said ING has dedicated "plenty of balance sheet" to the structured finance initiative, declining to quantify how much the buyer will put to work. He will focus on setting up the investing process initially, with an eye to ramping up and managing CDOs down the line. "The spread on double-B assets is what investors are chasing and by buying up and down the rating scale, we'll be better positioned to play in that part of the market," observed Ehlert.
Ehlert starts this week as a director and reports to Greg Ritchie, managing director and co-head of the strategic trading platform. Ritchie did not return calls by press time.
