12/16/2011

Securitization Vet Gets Back in the Business

A new brokerage firm is taking shape in London, with an eye toward structured-product and whole-loan trades.

The operation, Pepper Capital, is the brainchild of Jonathan Laredo — a longtime securitization specialist best known as the founder of now-defunct collateralized debt obligation issuer Solent Capital. He filed papers Nov. 24 notifying the U.K. Financial Services Authority of Pepper’s launch.

Although the nature of the affiliation remains unclear, Pepper’s name is known to reflect ties to Sydney mortgage-bond issuer Pepper Homeloans. The two sides now appear to be finalizing an agreement under which Laredo would aid Pepper Homeloans in distributing securitizations to investors worldwide and would act on the company’s behalf to broker purchases and sales of whole-loan portfolios in Europe.

Presumably, Pepper Capital would seek similar work from other clients. It also aims to aid customers in capital-raising efforts, with a focus on small and mid-size companies.

As for Pepper Homeloans, the company already is known for writing subprime loans at home and in the U.K. It also has been seeking to expand its presence as a prime lender, following the purchase of a $5 billion book of mortgages in Australia and New Zealand from GE Capital in August. The relationship with Laredo, meanwhile, reflects efforts by the company to extend its reach in Europe.

Laredo was joined in October by Mark Atmore, a marketing specialist who spent the previous two years raising money for the brokerage and hedge fund-management operations at Aladdin Capital. Atmore also has 18 years at Bear Stearns on his resume. He’s a partner at Pepper Capital, and was in New York this week to introduce Pepper Homeloans chief executive Patrick Tuttle to industry players.

Laredo left J.P. Morgan in 2003 to start Solent with Tim Gledhill and Geoff Smailes, both of whom had worked with him earlier at the former Bankers Trust. Solent quickly grew to become a frequent issuer of CDOs underpinned by asset- and mortgage-backed securities, with $7.4 billion under management at its peak in 2007. But it ran into trouble with the onset of the credit crisis, in part due to the blowup of a deal called Mainsail CDO 2. The firm eventually sold its CDO-management business to Aladdin in 2010.

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