Chatham Celebrates 25 Years

A Note from Our CEO and Founder Mike Bontrager

 
Twenty-five years ago as of August 26, Chatham officially opened its doors; or more accurately, its door. It was an office over my garage with a newly installed Telerate satellite dish outside linked to the markets I left on Wall Street. I decided to call the company “Chatham Financial,” not after the better known towns of Chatham, NJ or Chatham, MA, but after the nearby non-descript town with a single blinking yellow light. “Bontrager & Associates” seemed like a dead giveaway that it was just me and my dog!

The idea behind Chatham was not to sell a service but to become part of our clients’ team, helping them solve their risk problems. Convincing companies to pay for intangible value was tough, especially in 1991 when it wasn’t always clear to my prospects what the need was, let alone how I would be able to meet it. But better to be lucky than smart — my first big break was working with Kimco Realty when they went public in late 1991. Milton Cooper, Kimco’s Chairman, was exceedingly good to me, establishing key contacts in the real estate world as the industry increasingly turned to the public markets. As real estate opportunity funds began to form and the CMBS markets began to emerge, we were fortunate to play an early role, often helping to create standardization around the hedging products that were being used.

As the real estate markets took off so did Chatham. While we were working on large deals with some of the most significant players in the real estate market, we joked that we were “just a bunch of guys working over a garage,” which was literally true. We had many interesting twists in those early years, such as the time when I looked out the window in horror to see my four-year-old daughter lead a client in her heels across our back yard because my daughter had met her at the car and asked, “Do you want to see my bunnies before you see my dad?” Or the time my neighbor’s cows got out and decided to surround the building and moo loudly while we were conducting a swap auction.

At the turn of the millennium, accounting for derivatives became a significant challenge for many clients and we dedicated substantial resources to getting ready for FAS 133. We began investing in technology to prepare for the day when hedges would need to be on the balance sheet. At the same time, some of our opportunity fund clients began investing in Europe and after one client said to me, “Could you just get into our time zone?” we opened a London office and later one in Krakow, Poland.

We grew by following our clients’ needs. A request for help with one of the first defeasances ever done led Chatham to become the leader in defeasance. A real estate client wanted to do a swap but its bank had no swap capability, so we created a white label hedge capability for regional and community banks. Real estate opportunity fund clients referred us to the private equity side of the house and we now serve most of the largest global PE investors. Our PE clients asked us to work with their portfolio companies and now we serve hundreds of corporates, including Fortune 50 clients. As clients became more active in Asia/Pacific, we opened our Singapore and Melbourne offices to serve the region. When Washington and Brussels formed their policy response to the financial crisis, we engaged to make sure derivatives regulations contemplated end users. We then crafted regulatory solutions to help companies understand and comply with new rules.

Along the way we became a technology company to complement our advisory expertise. Our technology helps companies handle the many complex calculations and processes associated with managing a financial risk management program – from exposure analytics, to valuations, to accounting regressions and journal entries, to regulatory compliance and beyond. In time, we packaged the technology tools we had originally built for ourselves into a SaaS called ChathamDirect to enable clients to manage their own currency, commodity and interest rate risks seamlessly. We also built debt management and capital advisory capability to complement our risk management tools.

We have long since moved out of the office behind my house. We are now 450 people strong on four continents, but our attitude has not changed. The three ideas that Chatham was built on still remain— (1) deep expertise, (2) all under one umbrella, (3) with a partnership mentality. Early on we realized that trust is the critical component and we have endeavored to be good stewards of the trust you have placed in us. As we complete our 25th year, we feel so privileged to have enduring relationships with great clients, to build expertise in an intellectually stimulating area that has undergone extraordinary changes, and to demonstrate real impact in assisting clients through the storms and choppy waters of financial markets.

To those of you who are clients: Thank you for putting your trust in us. Your partnership has enriched us and we will work diligently to continue to earn your trust. To those of you who aren’t clients: We would love the opportunity to thrill you, as we have thousands of clients, who are navigating increasingly complex and volatile markets together with us.

Thanks for all your help in making our first 25 years great and we look forward to serving you over the next 25!

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