The Bond Buyer’s Rising Stars of 2018 may have very different jobs, from bankers to analysts to public officials, but they are united by optimism and a desire to make the muni market of tomorrow even better than that of today.
For some of the 28 men and women recognized this year, municipal finance felt like a calling that they worked towards for years. For others, a career in municipals happened by accident after a career change or a chance meeting. Most were forged in the fire of the Great Recession, and experienced the tremendous upheaval that event caused on both Wall Street and Main Street. But having experienced that valley, the Rising Stars consistently said they look forward to a robust and healthy muni market as the industry tackles long-term challenges like pensions and adjusts to a seemingly accelerating pace of technological change.
Kayla MacEwen, a director at Hilltop Securities in Boston, never considered herself good at math until she discovered a love of it in the 8th grade. She learned about municipal finance after meeting with the team of what was then FirstSouthwest at a career fair, she said, and liked what she heard about how working in munis would allow her to benefit communities. MacEwen said that the experience of working to finance Detroit’s Little Caesars Arena, a symbol of the city’s emergence from fiscal catastrophe, was especially gratifying to her.
“That was really one of the special moments in my career,” she said of seeing the arena open.
Rahul Jain, a director at S&P Global Ratings, said he felt drawn to public policy and went to study it and urban planning at Georgia Tech following Hurricane Katrina in 2005. He then joined a think tank before becoming a ratings analyst, where he says he really enjoys the diversity of experience it offers.
“It’s a great mix, ratings,” Jain said. “You get to talk to the issuer, which is something I really enjoy.”
“For me, the most appealing thing about munis was just the geographical aspect of it,” said Jason Ware, a managing director and head of institutional trading at San Francisco-based 280 Securities. “Each municipal bond that you buy is a piece of geography.”
After landing a job fresh out of college, Ware said he dedicated himself to learning all the ins and outs of munis. He was told with only about a week’s notice that he would be taking the Series 7 exam to become a licensed broker, and that passing it was one of the best moments of his life.
Fitch Ratings Director Scott Monroe said his entry into Muniland was “a bit of an accident.” He was a stockbroker, but didn’t love his work. After working for a large investment firm, he said he thought a rating agency might be the most natural place to be an analyst. Monroe started out on smaller California credits, but for the past three years has been focused on infrastructure. That worked well for him, he said, because he has a passion for transportation and holds a private pilot’s license.
“It’s one of those stories of stumbling into something, but finding that you really love it,” he said.
Matthew Naclerio, director of public finance credit and underwriting at Assured Guaranty found his way into the industry after meeting someone who worked at a now-defunct bond insurer at a party. Naclerio studied both economics and theater at Northwestern, and the Long Island native says he now spends a lot of time traveling and really digging into the deals Assured is considering insuring.
“It’s a lot of collaborating with underwriters, getting out on the road, understanding these deals,” he said.
Naclerio described himself as “cautiously optimistic about the municipal market,” and pointed to the challenge of “information overload” in an era when muni professionals have so much data available to them. “I think the flood of information will continue to pick up speed,” he said. “Ultimately, I think this will help the market and it will end up in a much stronger place.”
Houston Deputy City Controller Alex Obregon thought he was going to be a clinical psychologist. But after a former boss from an internship at city hall came calling he ended up in public finance. Despite the unexpected turn, however, Obregon said he still remains most gratified by the work his office does to help the people of the city.
“At the end of the day, that’s really what fuels me,” he said.
Though they have diverse background experiences and responsibilities, the rising stars were united in their belief that the muni market can still get better.
“I’m optimistic,” said Obregon. “There’s such a huge need for investment in infrastructure. We’re going to have to rely on the capital markets.”
Naclerio described himself as “cautiously optimistic,” and pointed to the challenge of “information overload” in an era when muni professionals have so much data available to them.
“I think this market is really picking up speed,” he said. “I think we will end up in a much stronger place.”
“I’m concerned politically speaking,” Monroe said, noting that the muni market has experienced a seismic event with a new tax code that barred advance refundings, among other changes. “But in general I see the arc of history as being good.”
MacEwen said the loss of advance refundings is one of the biggest challenges facing the market today, but was upbeat about how the industry will tackle that and other challenges such as rising interest rates. Challenges keep bankers creative, MacEwen said.
Ware alluded to the changes in the market, saying that a challenge lies in the fact that the audience for muni debt has changed. Banks and insurance companies are leaving the market, with just funds, exchange-traded funds, and mom-and-pop buyers left, Ware said.
“I do feel like there are some trials and tribulations in our market,” Ware said, but added that he believes those challenges can present an opportunity. “It makes me really optimistic about the future in munis,” he said.
