NeuroFinance SA – Principal Dr.Warren Burns.
Warren is a co-founding member of the CentreFin Alliance and Advisor to the Fintrust Group. He is also the Appointee Chairman of REBCo a real estate beneficiation company, an CentreFin Alliance Collaborator.
UAL Merchant Bank (Union Acceptances Limited)
Joined UAL in June 1997 to create a Financial Products business area.
• Warren and a colleague teamed up to build the business area, placing emphasis on asset management from a Treasury platform.
• Together they structured property ‘hedging strategies’ for UAL Property Management Services.
• Pioneered and ran a global macro hedge fund (in-house) that was concentrated mostly on equity positioning and the creation of a proprietary trading system within UAL treasury.
• The structuring and trading initiatives took precedence in building a financial products business area that co-integrated with an innovation desk within the bank (e.g. time spent in Isle of Man to build tax structuring capacity across instruments).
UAL was bought out by Nedcor Investment Bank, which was subsequently taken over by Nedbank.
• The Financial Products business co-founded by Warren, led to the creation of one of the largest Treasury debt packaging desks in South Africa (pricing and placement of debt management strategies and what was defined as yield ‘’pick-up’’). The residual features of the structuring initiative (debt packaging) created opportunities to build a specialist money market fund. The fund became a Treasury skills platform (defined philosophy, process, mandate and benchmark around structured instruments and actuarial measurement criteria) with an absolute return strategy and number one in the performance ranking in South Africa.
• As a debt and credit derivatives specialist, Warren played a key role in the creation of the Debt Capital Markets (DCM) team within Nedbank. As such, he was actively involved in creation of the first bond issue by Nedbank (R2-billion) and in the capital raised for the BOE acquisition in 2002. The principle drivers around innovation and ‘’value-add’’ involved winning the deal in-house, due diligence review (book-build and pricing), communication around effective strategy and coordination of marketing materials and investor roadshows. In addition, the financial modeling skills and structuring to assisting with the acquisition was mostly around debt related ‘’packaging’’ as well as legal review and regulatory / governance assessment and transactional advisory (mostly executive review).
• Process design around structuring of the term (duration), coupon optionality (building what was principally step-up clause facilitation), capital presentation, debt pricing, capital provisioning, as well as marketing (origination) of the transaction were all part of the debt-distribution area function.
• A positive “can-do” approach was central to the success in building an underwriting due diligence frame together with the placement of one of the largest bond issues in South Africa on record, and to the subsequent integration of financial products into Nedbank.
Quantitative analysis and experience,
• Analysing cash flow and structuring risk management solutions (strategic architecture around concavity of risk)
• Liquidity management (tools such as loss distribution simulation and Basle II)
• Portfolio credit modeling (stress testing methodology and simulation (annealing))
• Economic capital allocation (enterprise risk management (ERM) implementation and risk metrics assessment tooling))
• Probability of default estimation (PD)
• Joint probability of default (JPD)
• Loss given default (LGD)
• Correlation, covariance and volatility
• Understanding the practical nuances of debt structuring and innovation around underwriting (even to consider regulatory anomalies) and impairment risks as well as swap interpolation/ execution.
• The Financial Products business area was merged with Strategic Deployment to create Strategic Deployment and Financial Products as a business unit reporting to Treasury within Nedbank (Investment Banking area). This unit became the structuring and co-ordination area for working with Old Mutual (in Asset Management innovation and Treasury related products and debt origination).
• In 2005, the creation of a carbon finance structuring desk was initiated within Nedbank that was able to align with the Equator principles of the bank (innovation initiative and leader in green initiatives). This included the key elements of social, sustainable and economic additionality in assessing project/ investment risk and carbon finance opportunities to interface with Africa expansion and Project Finance.
• Responsible for building carbon asset management overview and sustainability business development across the Group and the start-up of a carbon desk. This mainly incorporated origination, design and execution around carbon asset management, enterprise risk management, systems integration, research and development (e.g. barrier analysis and additionality screening), project finance baseline, modeling and options valuation (adaptive risk approach/ multi-objective decision making assessment and modeling)
Senior dealer at First Derivatives (Joint Venture with First National Bank). The entity was recognized as the first specialized options and derivatives structuring house in South Africa (the area executed the first corporate swap in South Africa and was ascribed to the pioneering attitude and collaboration of an entrepreneurial spirit within the JV).
Commodities Sales and Trading/ Structuring interest rate and commodity risk
• Built and managed an enterprise risk management business model together with hedging tools, risk parameterisation and cash flow interpolation tools (e.g. swaps and options). First Derivatives was responsible for setting up the first dedicated energy and base metals commodities trading desk in South Africa. The area was principally a specialist risk boutique and hedging area with a strong financial modeling leaning that is now part of the RMB Group. The main aim was to build scale on behalf of the bank around options pricing and financial hedging (financial products design and innovation).
• Key alliances with international banks (e.g. Goldman Sachs) were formalized to enable execution of swaps, product development and options pricing (e.g., averaging of Rand swap price against base metal and energy derivative exposures for corporates). The alliances brought innovation and balance sheet that enabled the desk to structure the first jet fuel swap in Africa as well as the facilitation and execution of copper/ aluminum, nickel trading and risk management strategies through the London Metal Exchange (clients included Billiton/ Telkom/ Columbus Steel).
• The creation of venture capital opportunities in the structuring space led to entrepreneurial initiatives with the bank in the creation of an entity to be named First Venture. The venture capital initiative was terminated when Warren left First Derivatives to move into a business development role across mineral beneficiation/gas fired heater technology within Kinetics Technology International, a key subsidiary within the Mannesman Group. Key services included the packaging of software optimisation technology and the structuring of gas derivatives and platform design for refineries and building of feedstock plants in highly specialised value add areas like polyethylene. The company was known for its innovation and exceptional design standards ((world leader in burner technology (gas-fired), and emissions reduction technology (e.g., sulphur dioxide and NOX) on a worldwide scale.
A number of partnerships in commodity trading houses and marketing initiatives concentrating in Africa and cross-border trade. Areas of expertise: commodity trading, risk management and structuring. The business model was principally Africa focused incorporating trade finance skills across letter of credit, collateralised trade facilitation, brand building together with export incentives, export and factoring agreements; soft commodity beneficiation/ vertical integration across soft commodities (sugar, rice, flour, cooking oil, agronomy).
Warren is currently creating a Transactional Advisory Company with a key emphasis on Capital Raising, Green Finance and Green investment (development finance) and Asset/ Liability Management across property, renewable and infrastructure assets and developmental planning in Africa . At present, there are a number of projects he is co-founding with international and local partners across Africa which include energy efficiency, property development, waste management, carbon finance advisory, eco-tourism and biodiversity, renewable strategy and biofuels offtake agreements.
He is the ex-Treasurer for the South African Clean Development Mechanism Industry Association (SACDMIA) and has been involved in carbon finance product development in working with National Treasury and Government (Framework and Policy alignment) in the past three years.
Green property, transportation innovation, landfill (cellulosic ethanol), carbon capture and storage, biofuels (innovation and business model), agriculture and sequestration opportunities and eco-tourism are all areas of current focus to work with international partners on fund raising and fund management opportunities.
Ph.D (Wits University)
MBA (Surrey University)