Asset Class
The corporate credit portfolios are managed within structures such as hybrid CDOs referencing both cash and Credit Default Swaps (CDS) and synthetic CDOs (also called CSOs) referencing only CDS. The flexibility and liquidity of credit derivatives as an asset management tool and the ability to customize exposure to credit allow for a more efficient management of risk and return.
Team
The Structured Corporate Credit team comprises portfolio management, research and structuring professionals focusing on the active management of corporate credit portfolios within robust and flexible structures. Three of its transactions have been designated “CDO Deal of the Year” by various specialized media outlets so far, and Creditflux identified the SCC team as the largest manager of corporate synthetic CDOs in January 2007. The combination of performing asset management and state-of-the-art structures allows the team to deliver stable returns through credit cycles. Market conditions are carefully analyzed prior to the launch of a new product. In 2004, the team focused on issuing senior tranches of synthetic CDO, while in 2005, given the acute idiosyncratic risk, the team concentrated instead on junior mezzanine tranches or equities offering a good risk/return profile. In 2006, based on the cheap cost of super senior swap and high synthetic equity return, the team mixed the hybrid and synthetic formats into a single transaction. Finally, right before volatility set in for good in 2007, the team launched an innovative long/short structure enabling the ups and downs of a volatile market to be played.
Products
The team manages the portfolio of various structures including hybrid and synthetic CDOs. All of these structures focus on investment grade credit names and include a bucket for BB-rated names. Synthetic structures allow risk/return profile according to individual timing, currency, maturity, rating, credit enhancement, and coupon stream requirements. These customized products meet the needs of a variety of investor profiles (pension funds, corporations, governments, institutions, insurance companies, etc).
Team Leader
Laurent Gueunier
