MBIA Restructures Asset Management Subsidiary

MBIA announced that it has restructured its fixed-income asset management subsidiary.

According to a release, the firm, now known as Cutwater Asset Management, will operate under the MBIA corporate umbrella as a separate operating company focused on fixed-income asset management.

The company said that MBIA Asset Management was created to offer investment products to institutional clients. It now manages $42 billion in assets on a fee-for-service basis for clients that include local governments, pension funds, Taft-Hartley plans, corporations, endowments, financial institutions and insurance companies.

MBIA said the announcement comes as part of its overall transformation effort to create a traditional holding company structure in which its individual business units operate as separate entities.

"With MBIA's public finance and structured finance insurance businesses already operating as separate legal entities, today's announcement reflects the next logical step in implementing the transformation strategy that we began pursuing nearly two years ago," said Bill Fallon, MBIA President and Chief Operating Officer. "From its modest beginnings in the early 1990s, Cutwater has grown to become one of the 50 largest fixed-income asset managers in the world and a full-service provider of fixed-income products and strategies to its diverse client base. By providing it with a greater level of financial and operational independence, we have now positioned it to accelerate the solid growth it has achieved over the past two decades."

The company said that Cutwater will continue to be led by its current management team, including Clifford D. Corso, who was named President and Chief Investment Officer of Cutwater.

"We have built an experienced team and investment philosophy focused on the goal of consistently producing top-tier investment performance through any market cycle," said Corso. "The establishment of Cutwater formalizes our existing separation from an operational and financial perspective, and enables us to more effectively meet the needs of a widening array of institutional investors. We chose the name 'Cutwater', a stainless steel strip that protects the bow of a boat, to convey a guiding principle that defines our investment philosophy - successfully navigating our clients through turbulent waters while focusing on the long-term horizon and maximizing investment performance."