JCRA Financial LLC, a financial risk management and structured finance advisory firm, announced this week that veteran banker Richard H. Gregory was hired as managing director.
JCRA is a New York-based subsidiary launched in October 2008 by London-based J.C. Rathbone Associates, which was established 20 years ago.
“The U.K. business deals with government-related types of transactions, so what we’re effectively doing is expanding that portion of the business,” said William Kloehn, chief executive officer of the New York branch. “That’s where Richard’s expertise is.”
For the past 20 years Gregory has been working at Bayerische Landesbank, where he was head of debt capital markets. His primary roles were managing North American operations and running the municipal reinvestment business.
“We built that up from scratch, basically, to what was a large, multibillion [dollar] business and typically a top three provider in that space,” Gregory said. He added that the department was “one of the large drivers for the funding for the bank.”
Municipal reinvestment can be complex. It involves taking the money generated from selling debt and investing it before it is spent on its intended purpose.
“It requires an in-depth knowledge of the interest rate risk inherent to the municipal financing, and therein lies the experience for that type of advice,” Gregory said. His group at Bayerische had more than 1,000 contracts with hundreds of municipalities over the past two decades, he said.
In moving to JCRA, Gregory said the idea is to leverage his experience working with a bank’s balance sheet and to advise municipalities that need to hedge risks in the upcoming tumultuous period.
Prior to his work with Bayerische, Gregory was a vice president in municipal underwriting at Lehman Brothers.
Last year, 354 different firms took part in advising municipalities financially, according to Thomson Reuters.
Kloehn, who spent 17 years at Citi structuring and executing derivative products, said two things set JCRA apart from the rest — education and independence.
“Virtually all of the people we have in JCRA have in-depth financial experience in markets,” he said. “In addition, although we have the various pricing tools in order to price everything, we do not trade in the background, and that gives us independence in our advice and ensures, from a client’s perspective, that they truly get independent advice.”
Gregory added: “Unlike some of the other similarly registered and regulated entities, we do not participate in underwriting or lending — we are solely focused on financial advisory work.”
So far, the New York office is manned solely by Kloehn and Gregory, with the support of 40 staff members in the London office.
JCRA plans to work with private-equity firms, corporations, and municipalities with the aim of hedging their financial exposures against interest rate, credit, foreign exchange, and inflation risks. The firm said it already has private-equity clients but declined to name them.