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May 19, 2017  

Callahan, Smyth Depart World Class Capital

Two industry veterans who recently joined World Class Capital to help build out its debt-investment platform have left the firm.

Longtime commercial MBS trader Christopher Callahan resigned late last month to run his own lending shop. He’s buying a small HUD-approved lender that originates Ginnie Mae loans, and plans to quickly hire 7-10 originators, underwriters and servicing pros.

Meanwhile, B-piece investment pro Paul Smyth left World Class within the past two weeks. His plans are unknown.

World Class, an Austin real estate investment firm led by Nate Paul, kicked off a debt push last fall, hiring Smyth and Callahan, both Credit Suisse alumni. In January, it added long-time originator Jeremy Stoler, also most recently at the Swiss bank, to run an originations platform.

Stoler remains at World Class, and his corner of the business appears to be growing. The picture is less clear on the bond side. The firm made one B-piece acquisition in October, taking the bottom classes of a conduit deal led by Wells Fargo (WFCM 2016-LC25). A source familiar with the company’s strategy said World Class is still committed to B-piece investing, but faces headwinds in the current market, where a broad field of competitors is bidding for a limited supply of tradeable B-pieces.

Callahan often put together, distributed and traded securitizations of agency mortgages — including Ginnie loans — during his 20-year career as a CMBS trader at Credit Suisse, Bank of America and Nomura. He’s moving to the lending side by purchasing Phares Co. of Georgetown, Ky., from the shop’s president, Ford Phares, and his wife, Sharon Phares. They and their junior staffer will stay on for a time after the sale closes, likely in July.

Callahan will take over as president and open an office in the New York area. He’ll be joined there by Jeff Goldberg, who previously worked for Callahan as a trader on the CMBS desks at Credit Suisse and BofA. “The goal is to ramp up originations and increase the servicing portfolio,” Callahan said.

Although he also focused on private-label bonds in his trading career, “the agency CMBS business has always been near and dear to my heart,” Callahan said, noting that he sometimes worked with Phares when assembling collateral for Ginnie offerings. The lender was founded about 25 years ago by Ford Phares’ mother, Nancy Phares, who died last year.