Difficulties of a cutting-edge market

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Precisely because it is an industry at the cutting edge, however, it is a difficult one in which to provide training. Investment banks resort largely to in-house courses at junior levels, and are finding an increased need for cross-divisional training in this field. For the most part, securitisation at more senior levels finds its training in the transient world of seminars and conferences.

Euromoney Training remains the leading provider of open courses in asset securitisation, with a four-day residential course at its training centre in Surrey. The programme leader for the course is Zoe Shaw, a managing director of Bank Gesellschaft Berlin. She is jointly responsible for a division that includes investment banking, marketing, syndicated lending and securitisation and is based in London.

The faculty of nine includes Andrew Gardner, a director in the securitisation and principal finance group of Deutsche Bank in London and Bruce Gaitskell, the former head of the asset-backed group at UBS and now the strategic adviser to the board of Cityscape.

The Euromoney course has a fully inclusive fee of 3,466.25 per delegate, with a discount for group bookings. It is marketed as being of particular value to asset securitisation executives and structured finance managers, syndication managers, bond/floating rate note traders, corporate treasurers, and consultants, lawyers and accountants involved in securitisation. Further information is available from their website on www.euromoneytraining.com.

The increasingly cross-divisional nature of the business is causing investment banks to find that they need short training sessions to introduce securitisation skills into other areas.

Deutsche Bank recently ran an internal course for its corporate credit team that focused on securitisation and asset-based financing techniques with an emphasis on the implications for a corporate involved in a securitisation transaction.

'We usually want to cross-transfer knowledge between divisions,' says Fiona Collinson, head of investment bank training at Deutsche Bank. 'We might do product training on securitisation for relationship managers, for example.'

At the graduate training level, the investment banks tend to use in-house training for the purposes of teaching securitisation skills. 'We have a good overall graduate training course, and we tend to recruit from within the bank except at senior levels. We train people up ourselves - that way they don't come in with preconceptions and are willing to learn,' says Luke Mellor, global head of the inter-securitisation group at ABN Amro in London.

Mellor says the difficulty for any investment bank lies in the fact that trainers in securitisation are afflicted by the constraints of hindsight. In this industry innovation is the key. 'When you do a deal for an issuer, each one has to be differently structured,' he says.

At CSFB, Diana Turner, vice-president asset finance, agrees. 'We would not send our people out for securitisation training because there are no trainers who would know what we know - as a field it is too compartmentalised. What you require from an individual is not what anyone else requires. You hire someone in to do something specific or as a country specialist. We have a matrix of responsibilities and also rough coverage by country and industry,' she says.

Securitisation in London is often described as a small and incestuous market, in which there may be new entrants from time to time, but the amount of existing talent stays the same. This inevitably means that there are great advantages to be gained from skilful networking within the market. When an investment bank gets someone new in securitisation, it often sends him or her along to the next conference available.

There are at least three securitisation conferences a year - one in Bermuda, one in Arizona and one in Europe - run by the recognised US guru of securitisation, Frank Fabozzi and his company Information Management Network. The June conference has been described by participants as 'more of a hob-nobbing exercise' but the Fabozzi conferences are well known for the quality of the backers and the participants. Most of the larger conferences are geared to networking and often demand attendance in order to prevent poaching. 'If you have a client who speaks at a conference, you have to go along just to make sure he doesn't speak to any other investment banks,' says the global head of securitisation at an investment bank that is a leading player in the market.

Smaller conferences on securitisation run by the rating agencies are popular with players in the market as these occasions often offer more of a learning opportunity, say sources in the market. Standard & Poor's and Fitch Investor Services offer conferences once or twice a year, and Moody's has held seminars on securitisation in the past but has no plans for one in the near future. Standard & Poor's holds an annual conference in Palm Springs that has been running for the past 10 years.

'The rating agencies run decent conferences, and they don't have an axe to grind. They also go into levels of complexity that others avoid because they are aiming for the lowest common denominator. People go along to these conferences because you can find out about changes of legislation, changes of rating policy, new asset classes...it can be very useful,' says the head of securitisation at an investment bank.

The rating agency conferences also tend to be free. Standard & Poor's runs free one-day conferences throughout Europe, and concentrates on making them country-specific. It has targeted certain asset classes primarily in Europe, such as residential mortgages, consumer assets such as credit cards and car loans and collateralised loan obligations (CLOs) specific to a country, which have been very popular recently.

Standard & Poor's has also started to offer one-week corporate finance training programmes in Europe, which include a day of structured finance. The agency meets investors regularly and makes presentations to their credit committee, as well as having regular sessions with securitisation teams at the investment banks. It is increasingly committed to helping to educate the market.

'We see our role as negotiating on behalf of the investor and building a transaction to achieve a certain quality of comfort - to try to get as big a universe as we can to understand the pitfalls of buying. We see this [European securitisation] market as in its infancy and we would like to see it go forward,' says Kurt Samson, managing director in London for Standard & Poor's rating services for structured finance in Europe.

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