SCI Awards: Investor of the Year

Category: Capital Relief Trades ABS

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Winner: Christofferson, Robb & Company

Ever-present in risk sharing transactions (RST) since its formation in 2002, the CRT awards year 2020-2021 was not an unusual one for Christofferson, Robb & Company (CRC) in many respects. However, the firm did break with usual practice in one way – it allowed more issuers than usual to make its role in their deals public and as a result give us the opportunity, at last, to award the firm investor of the year.

“It’s kind of thrilling to be recognised by SCI as we approach our 20th anniversary,” says Richard Robb, the investment manager’s ceo.

Indeed, while 2020 saw CRC invest an impressive €1.23bn across about a dozen RSTs, it was the fifth year in a row that it had made similarly high levels of investment in the sector. Consequently, the firm maintains the estimated 30% market share in bilateral synthetic RSTs it has held for a number of years.

Now with 60 staff focused on RSTs based in London and New York, as well as a new office in Tokyo, CRC continues to look at multiple regions and asset classes - typically where bank or corporate funding isn’t readily available from international capital markets, for the right opportunities for its investors. To this end, CRC was instrumental in establishing the Greek RST market this year.

March 2021 saw the closing of Piraeus Bank’s synthetic securitisation with CRC. The approximately €120m financial guarantee references a €1.4bn portfolio of Greek corporate and SME loans and is the Greek market’s first capital relief trade.

The Greek lender purchased credit protection on a portfolio that corresponds to €800m of risk weighted assets. As a result of the transaction, the bank will release around €100m of regulatory capital.

The deal is expected to open up the market both for Greek and standardised banks which will utilise the technology for their capital management. Further, Piraeus and CRC have already completed a second transaction releasing another €1.2bn of RWAs.

Though always happy to publicly advocate for the risk sharing business more broadly and insistent on transparency with investors, issuers and regulators alike, CRC is often low key at the transaction level in terms of publicity. As such, the Piraeus deals are unusual but far from unique this year.

As noted above, a number of CRC’s other investments have also reached the public domain. Notably, these include three of 2021’s award winning deals.

First, is the transaction of the year: Banca Monte dei Paschi di Siena’s ground-breaking Stage Two asset deal – Siena 2021 - RegCap-1. Second, is innovation of the year: FCT Colisée 2020, Société Générale’s residual risk STS synthetic first. In addition, CRC was investor in honourable mention recipient for impact deal of the year: GARC Energy Renewables-1, Intesa Sanpaolo’s first Italian pure renewables transaction.

So, while 2020-2021 may be just another year for CRC, it is a remarkable one by any standards and makes the firm our worthy winner this year.

Honourable mention: Seer Capital Management

Seer Capital Management’s well-established and highly experienced involvement in capital relief trades, combined with the flexibility inherent in a diverse structured credit-focused investment firm, enables it to take advantage of and support changes in the market. This year, with the increase in asset classes and structures, particularly in the US, Seer did just that and earns it the Honourable Mention for Investor of the Year.

As the US market moved incrementally into new transaction types beyond the GSE credit risk transfer space in 2020/2021, Seer was there and broadening its investment portfolio. At the same time, it maintained its reputation as a strong investor in Europe, willing to share risk in a growing array of asset classes and structures.

Seer is based in New York and has over US$1bn in assets under management, as of 30 September 2021. The firm has 29 employees and has been a registered investment advisor with the US SEC since 2009.

A number of Seer employees are former senior members of Deutsche Bank’s securitised products group, where their involvement in synthetic securitisations goes back to the development of bank reg cap through the CRAFT and GATE CRT programmes. Overall, the firm’s senior investment team has on average more than two decades of experience working in structured credit.

Seer prides itself on being a multi-asset structured credit manager, rather than a firm largely focused on CRTs referencing corporate credit alone. It argues that doing so increases its ability to be opportunistic and flexible with the timing of its investments.