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June 22, 2018  

New Assignments for Morningstar Execs

Morningstar has promoted three senior members of its structured-finance staff, with two of them absorbing duties that formerly belonged to chief operating officer Joe Petro.

Managing director Becky Cao is filling a newly created position in which she aims to ensure the quality of the agency’s securitized-product ratings via proper applications of its evaluation procedures. Michael Brawer and Brian Vonderhorst, meanwhile, are splitting a job that opened with Petro’s resignation in May.

Brawer is inheriting the chief operating officer title, with Vonderhorst taking the newly created designation of head of sales and business development. Cao and Brawer will move into their new posts on July 2. Vonderhorst’s assignment kicked in on June 18.

With the moves, Morningstar is seeking as many as eight people to fill the roles formerly held by Cao, Brawer and Vonderhorst — along with some new ones. The recruits would include separate business-development personnel on the agency’s asset- and mortgage-backed bond teams, along with rating and surveillance analysts.

Cao, Brawer and Vonderhorst report to president Brian Grow. “I had some names from outside but we wanted to see what happened internally, and we found some very good candidates,” he said.

Cao has been working on Morningstar’s mortgage-bond rating team since arriving in 2012 from S&P. Brawer signed on in 2016 as chief compliance officer, following stops at S&P and AIG. Vonderhorst has been handling sales and business-development efforts since coming on board in 2011 from Experian. He also has worked at EdgeMac and S&P.

Morningstar named Grow to his current position in February, filling a post that opened with the yearend retirement of Vickie Tillman. Grow had been head of asset- and mortgage-backed bond ratings at Morningstar.

As the agency’s number-two staffer, Petro was widely seen as Tillman’s more probable successor — an expectation that played into his exit.

Morningstar has been the least-active rating agency in the market for U.S. asset- and mortgage-backed bonds, behind S&P, Fitch, Moody’s, DBRS and Kroll. Indeed, it claimed a mere 5% market share in 2017 with assignments on 33 new deals totaling $14.8 billion.

The company has earned a following in the markets for deals backed by rental-home receivables and subprime-mortgages, however, along with risk-transfer transactions from Freddie Mac. It also recently graded its first student-loan deal, and is evaluating its first securitization of newly originated jumbo mortgages since 2015.