The 20 Rising Stars of Fixed Income 2008

radar. He also is a member of the rating agency’s Criteria Committee and Leveraged Finance Analytical Review Committee, through which he and other senior analysts help to establish firm-wide policy and procedures. Loughlin sees his biggest challenge as determining how to maintain surveillance and opinion on the companies his group covers amid the current credit crunch. “Up until the past several months, we have been adapting to companies showing much more debt on their balance sheets,” he said. “But as the economy deteriorates and liquidity dries up, we will be challenged with evaluating highly leveraged companies amid difficult economic conditions and tight credit markets, which creates more chances for problems.” 12. RUSSELL MASDING Senior Investment Consultant Watson Wyatt, London Age: 34 Education: St. John’s College, Cambridge University (B.A. in Natural Sciences) Mentor: Nick Horsfall, Senior Investment Consultant, Watson Wyatt Masding is a senior investment consultant at Watson Wyatt, which he joined in 1995 upon completion of his university degree. A member of the consulting firm’s structured products group, he is part of a team that provides advice to U.K.-based pension funds and other institutional clients on bonds, interest rates and derivatives strategies. He also works with institutional investors on investment strategy, the selection and monitoring of investment managers and manager structure. Masding believes both the fixedincome and pension markets will face dramatic changes in the next 10 years, as they have in the past 10 years.“In the fixed-income world, the industry will need to come to terms with how to manage the huge amount of flexibility that derivatives have brought,” he predicted. “In addition, there will need to be a re-emphasis on the fundamental reason for the market, which is to facilitate lending from those with capital to those who wish to borrow.” With the traditional U.K. pension system – like many around the world – under threat, Masding hopes to play a pivotal role in ensuring secure pensions for the ‘man on the street’ in order to avoid what he called the personal and societal issues associated with poverty in old age. “The main challenge for me personally is to ensure that the advice I give pension funds is independent, adds value and is long-term in nature,” he FIXED INCOME RISING STARS 19 11. KYLE LOUGHLIN 11. KYLE LOUGHLIN Managing Director, Commodities Practice Standard & Poor’s, New York Age: 41 Education: Quinnipiac University (B.S. in Financial Management); Rutgers University (M.B.A.) Mentors: Tom Kelly, Managing Director and Practice Leader, Standard & Poor’s; Jeff Pack, Senior Vice President, ANZ Banking Group; Andrew Watt, Managing Director and Practice Leader, Standard & Poor’s As managing director of the commodities practice at Standard & Poor’s, Loughlin leads a team of 12 analysts and research assistants in overseeing relationships with the 130 companies on his group’s MAY 2008 With the old assumptions about risk out the window, rating agencies need to evaluate these companies differently, Loughlin asserted. “We need to be prospective and model better scenarios and stress tests because, in these uncertain times, there are few places investors can turn to for reliable information,” he said. As a result, he noted that Standard & Poor’s has rolled out default scenarios and recovery ratings for all speculativegrade companies. On a positive note, Loughlin said the future looks good for fixed income. Investor demands for capital and the increasing speed by which investments are made indicate a positive future for the business, he noted. In addition, there has been an explosion of demand for corporate ratings in developing markets, particularly in Asia. “You have to feel good about the trends that are developing,” he added. As for his future, Loughlin sees himself continuing to have an important role in the ratings business. “The only difference is maybe I’ll be working with a different team or focused on a different industry,” he added.

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