Bear Stearns Asset Management
17 Sep 2007
Overview
Bear Stearns Asset Management’s reputation was hit hard by the collapse of
two of its dedicated structured credit hedge funds in June, writes Duncan
Kerr.
Ralph Cioffi, a former bond salesman at Bear Stearns, led the CDO division.
However, after the fund collapsed he stood back from day to day operations
to act as an adviser.
Cioffi was involved in the initial structured credit efforts at Bear Stearns. With Raymond McGarrigal, senior managing director of fixed-income credit structured products and Matthew Tannin, senior managing director on the CDO structuring desk, his management team was one of the most highly regarded on Wall Street, with more than 40 years’ experience between them.
Hedge funds had flocked to Bear Stearns’s high-grade CDO business for financing. The team’s extensive capital markets experience and its commitment to the CDO platform, was marred by Fitch’s warning last year that its centralised decision-making process may create key-man risk. Fitch said complex initiatives, running concurrent with CDO issuance, could prove problematic.
Fitch placed BSAM’s CAM 2 CDO manager rating on negative watch on June 22 as a result of the implosion of the High Grade Structured Credit Strategies hedge funds and the “uncertainties” related to its business strategy and capacity of the team.
CDO assets $14bn+, based on Creditflux data
Top managers Raymond McGarrigal, senior portfolio manager
Flagship CDO funds Klio, Stone Tower, High Grade Structured CDO
Cioffi was involved in the initial structured credit efforts at Bear Stearns. With Raymond McGarrigal, senior managing director of fixed-income credit structured products and Matthew Tannin, senior managing director on the CDO structuring desk, his management team was one of the most highly regarded on Wall Street, with more than 40 years’ experience between them.
Hedge funds had flocked to Bear Stearns’s high-grade CDO business for financing. The team’s extensive capital markets experience and its commitment to the CDO platform, was marred by Fitch’s warning last year that its centralised decision-making process may create key-man risk. Fitch said complex initiatives, running concurrent with CDO issuance, could prove problematic.
Fitch placed BSAM’s CAM 2 CDO manager rating on negative watch on June 22 as a result of the implosion of the High Grade Structured Credit Strategies hedge funds and the “uncertainties” related to its business strategy and capacity of the team.
CDO assets $14bn+, based on Creditflux data
Top managers Raymond McGarrigal, senior portfolio manager
Flagship CDO funds Klio, Stone Tower, High Grade Structured CDO
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