Lazard beefs up non-core asset advice

ADVISORY bank Lazard has hired a team of credit experts in London to help banks and investment managers address a vast overhang of structured products still plaguing their balance sheets.

The team, to be led in Europe by managing director Alan Patterson, will give strategic advice on how to rebalance or wind down the billions in non-core assets such as collateralised debt obligations (CDO) and commercial mortgage-backed securities (CMBS).

Patterson estimates there are €2 trillion (£1.8 trillion) of asset-backed securities in Europe, €100bn of them CMBS due to mature by 2014.

With values for many of the products having dropped through the floor after the financial crisis, many institutions have held onto the products for fear of taking hits to their earnings statements when they have to mark them to market.

Patterson said: “There are lot of institutions that invested heavily in the structured credit space. Constraints on the funding available and changing regulation on capital have all come together to make these portfolios less relevant than they were once thought to be.”

Lazard, led in London by William Rucker (pictured), has made the move following a spate of hiring by UBS to boost its structured credit products trading team. The bank hired 12 managing directors to its structured credit desk last year.