Cheyne Capital Appoints Former Barclays Executive Frank Benhamou to Lead £2 Billion Synthetic Risk Transfer Strategy

Cheyne Capital, a London-based alternative investment firm, has hired Frank Benhamou, a former Barclays Plc executive, to spearhead its £2 billion synthetic risk transfer (SRT) strategy. Benhamou, who has 17 years of experience at Barclays, was instrumental in establishing the bank's Colonnade Programme, one of the largest SRT platforms globally.

Benhamou joins Cheyne Capital as a portfolio manager for the risk transfer strategy after serving as the head of capital and structured funding solutions at Barclays. During his tenure at the bank, he held the position of managing director and played a key role in setting up and leading Barclays' Colonnade Programme.

Cheyne Capital is re-entering the SRT market after approximately six years, aiming to implement a £2 billion strategy. The firm has already invested a portion of the target amount in several SRT transactions earlier this month. SRT transactions enable banks to buy protection on their loan portfolios, helping them release regulatory capital or manage risk.

Why this matters: The hiring of Frank Benhamou and Cheyne Capital's re-entry into the SRT market signify the growing importance of synthetic risk transfer strategies in the banking industry. As banks seek to optimize their regulatory capital and manage risk more effectively, the demand for experienced professionals like Benhamou and specialized investment firms like Cheyne Capital is expected to increase.

In 2022, banks worldwide engaged in SRT transactions valued at $25 billion, covering the risk of loans totaling approximately $300 billion. While European banks have been the biggest users of such transactions in the past, the largest increase in SRT volumes is likely to come from large Wall Street banks, depending on how stringent US regulators decide the latest regulatory capital requirements should be.

Risk Management Vital:"Significant risk transfer transactions allow banks to buy protection on their loan portfolios in order to release regulatory capital or manage risk," a spokesperson for Cheyne Capital stated, highlighting the importance of these transactions in the current banking landscape.

Key Takeaways

• Cheyne Capital hires Barclays veteran Frank Benhamou to lead £2 billion SRT strategy.
• Benhamou was instrumental in establishing Barclays' Colonnade Programme, a major SRT platform.
• Cheyne Capital re-enters the SRT market after 6 years, aiming to implement a £2 billion strategy.
• SRT transactions enable banks to release regulatory capital and manage risk more effectively.
• Demand for SRT expertise is expected to increase as banks optimize capital and manage risk.