02/26/2010

Spring Hill Seeking to Expand Broker Unit

Spring Hill Capital, which received its broker-dealer license from the Financial Industry Regulatory Authority on Wednesday, plans to hire up to 10 structured-finance specialists by yearend.

The New York company wants to beef up its 20-member staff so it can take on assignments to distribute new issues of commercial MBS and other structured-finance products as markets revive. The firm, which was formed about a year ago, also wants to step up trading of CMBS, residential mortgage bonds, CDOs and asset-backed securities in the secondary market, where it has been crossing bonds on a borrowed license since last year.

Spring Hill has already started recruiting a structured-product sales chief, said managing partner Kevin White. He's also interviewing candidates for the sales and research openings, which range from entry-level to senior posts.

The sales-and-trading desk mostly targets illiquid securities, commercial real estate debt and equity. The firm also provides advisory services and is in the process of setting up a commercial-property fund. White said the three-prong strategy differentiates the company from a slew of other broker-dealers that have cropped up during the credit crunch.

Its advisory clients in the commercial real estate sector include insurers, regional U.S. banks and large European banks that need help evaluating and managing their investments in distressed CMBS, CDOs, mortgages and properties. Spring Hill also works with special servicers and CDO managers to restructure or liquidate troubled loans.

On the fund side, Spring Hill expects to start raising $250 million of equity for its debut vehicle in April. With leverage, the fund would have $500 million of buying power. The manager is shooting to close on its first round of equity by September, which would allow it to start putting capital to work by yearend.

The fund would buy full or partial stakes in properties, sometimes with partners. It would also buy commercial mortgages or CMBS with an eye toward taking over the collateral.

Before forming Spring Hill, White was a managing director in the securitization area at Lehman Brothers for many years. Many Lehman colleagues have joined him at Spring Hill. In his last role at Lehman, White was responsible for unwinding the investment bank's holdings of commercial properties, CMBS and other structured products. He previously headed the global securitization syndicate desk, including CMBS coverage.

Back Print