07/09/2010

Wells Taps McShane for a Top CMBS Post

Former Morgan Stanley executive Kara McShane will join Wells Fargo next week to spearhead the bank's drive to set up a capital-markets operation for commercial real estate.

McShane, a managing director, will shepherd commercial MBS transactions to market and also serve as chief trader of new-issue CMBS deals. She will report to managing director Julie Caperton, head of asset-backed-finance and securitization.

McShane's post mirrors the one she held at Morgan Stanley before the bank slashed its CMBS group at the end of 2008. She ran that bank's capital-markets team for structured-finance products.

When the securitization market was flourishing, Wells was an active originator of CMBS loans, but lacked the capability to underwrite securitizations and distribute the resulting bonds. So it contributed loans to securitizations led by Morgan Stanley.

But Wells inherited a broker-dealer arm via its acquisition of Wachovia at

yearend 2008. Now it intends to start underwriting transactions, an effort McShane will oversee as capital-markets chief in the securities and investment group. McShane, who declined to comment, is expected to recruit staffers to build out the platform.

While many other lenders remain on the sidelines following the market slump, Wells has been relatively active in recent months. The bank, whose $130.4 billion commercial real estate loan portfolio is already the nation's largest, has been building out its CMBS lending team. As previously reported, it is setting up a large-loan group headed by managing director Jon Martin. That group could retain, syndicate or securitize the loans.

While the bank clearly plans to issue and underwrite its own CMBS deals, it is also leaving the door open to joining deals led by other firms.

During McShane's seven-year stint at Morgan Stanley, the bank was the top global bookrunner of CMBS transactions. It established itself as the leading underwriter for lenders like Wells that didn't have broker-dealer arms. Wells was a key member of a group of lenders that floated 29 deals under the "TOP" brand, which referred to the relatively high quality of the collateral.

Before joining Morgan Stanley, McShane was a portfolio manager and trader for the commercial real estate sector at Alliance Capital and at Sanford C. Bernstein & Co.

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