Wednesday, February 10, 2016

Mike McKay of Kramer Van Kirk Credit Strategies Visited the AIM Program This Week.

On Wednesday, February 10, 2016, Mike McKay, Managing Director and Head of Credit Research for Kramer Van Kirk Credit Strategies, presented in Dr. Krause’s AIM class. Kramer Van Kirk Credit Strategies (KVK) is a Chicago based, credit asset management firm. It was established in 2012 and managed by Principals Tom Kramer (Marquette alumnus) and Tim Van Kirk. 

KVK has more than 20 credit, operations and compliance professionals with extensive experience in the credit markets.  KVK’s strategy focuses on Collateralized Loan Obligation (CLO).  Since the firm’s inception, Kramer and Van Kirk have structured eight deals in excess of $4B in assets under management. KVK has extensive knowledge of bank loans and structured vehicles with a history of raising and managing eighteen CLOs.

Image result for collateralized loan obligationMr. McKay has the overall responsibility for the structure and development of the credit research group comprised of nine research analysts. Mr. McKay has over 20 years of company specific credit analysis and industry risk assessment and reports directly to the Chief Risk Officer. Prior to joining KVK, Mr. McKay was a Credit Director at GE Capital Commercial Finance where he was responsible for a team underwriting and managing a loan portfolio in excess of $1B.

He shared interesting material with the AIM students about the CLO market over the past decade. His presentation included a discussion about the process KVK employs in structuring collateralized loan obligations. The students learned about the CLO cashflow life cycle, tranches, and the sourcing of assets. He shared an interesting data item with the students – between 1994 and 2015, S&P rated over 6,000 CLO tranches and only 25 were downgraded to a rating of D – a mere 0.41% of all CLOS – and of these most were not structured as traditional CLOs. These weren’t the securitized products that were the gist of The Big Short!  

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