C. Robert Krebs, a pioneer in the creation of synthetic guaranteed investment contracts, will join NISA Investment Advisors LLC, St. Louis, in March.
Mr. Krebs hopes to capitalize on the trend by defined contribution plan sponsors to move to synthetic GICs. "Today roughly 40% of placements are going to synthetic GICs," he said. With some $50 billion in all types of GICs issued every year, that means about $20 billion are synthetic GICs.
Mr. Krebs is quitting Providian Capital Management (formerly Capital Holding Corp.), Louisville, Ky., where he has been managing director-institutional marketing and product development.
Mr. Krebs, a leading figure in developing the insurance industry's first actively managed synthetic GICs in 1991 while at Capital Holding, will be director-pension services for NISA, a new position, and become a co-owner.
Providian is one of the largest wrappers of synthetic GICs, with $8.8 billion in wraps, or guarantees, supporting bond portfolios managed by others. NISA, on the other hand, runs about $500 million in actively managed bond portfolios underlying the synthetic GIC wrap.
NISA hopes Mr. Krebs can develop more synthetic business, especially with 401(k) plans.
At Providian, Rudy Gernert will take on Mr. Krebs's institutional marketing duties in addition to continuing as chief financial officer.