10/31/2008

CWCapital Taps Philipp to Head Advisory Unit

CWCapital has hired commercial MBS veteran Tad Philipp to oversee a new business that will advise clients on how to evaluate and manage commercial real estate risk.

With the move, Boston-based CWCapital is seeking to build upon its experience as a B-piece buyer and servicer. And it has turned to a well-known CMBS specialist to head up the effort. Philipp spent 17 years at Moody's, most of the time in charge of the CMBS group, before leaving in July.

The new unit, dubbed CWCapital Investments Risk Management Solutions, will analyze CMBS, whole loans, mezzanine loans and equity positions in order to determine valuations. It will also devise hedging, workout or capital-management strategies. Clients are expected to include banks, insurance companies, monoline insurers and other financial institutions.

The operation will also be positioned to apply for contractor or subcontractor assignments for the federal government's $700 billion Troubled Asset Relief Program (TARP) or for the FDIC.

Philipp, a managing director, started yesterday at CWCapital's New York office. He reports to Charles Spetka, president of the investment and asset management divisions. The advisory team also includes senior vice president Julia Hu, who was already on board at the firm.

The plan is to launch the business with those three key players and rely on support from other CWCapital staffers, including servicers, appraisers, analysts and lawyers.

"We're going to use the existing infrastructure in a different way, and work with the staff that CWCapital already has," said Philipp. "This is the same group that has a long track record of underwriting and managing below-investment-grade CMBS. The idea is to make available to the market the expertise that CWCapital has already developed as a high-yield investor."

Philipp joined Moody's as an associate director in 1991 and took charge of the two-person CMBS group the next year. In 2002, Jim Duca joined Philipp as co-head of the CMBS group. In November 2006, Duca became sole head of the group after Philipp shifted over to head the commercial real estate CDO group - then the new hot area. But Philipp still maintained an active role on the CMBS side, working more on commercial mortgage metrics and indices than on transaction ratings. He announced his early retirement in March, saying it was time to move on.

Under Spetka, CWCapital's investment division has created three opportunity funds and issued seven CDOs. Spetka joined CWCapital in 2003, after a 7-year stint at GMAC Commercial Mortgage.

CWCapital manages $11 billion of commercial mortgages and services a $200 billion loan portfolio. At midyear, it ranked as the second-largest special servicer, with $177.3 billion of contracts, after LNR Partners ($225.8 billion), according to the Mortgage Bankers Association. The company, formed as a mortgage bank in the early 1990s under the name Continental Wingate, is now a subsidiary of Caisse de Depot et Placement du Quebec, the largest institutional fund manager in Canada.

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