After a summer that was packed with recruitment activity, the procession of senior securitised products traders moving from one job to another has spilled over into September, even as one bank warns of weak profitability in the business.
“It’s been an eventful summer,” said an investor who has been attempting to keep track of the moves. “It’s been a bit of a merry-go-round.”
The most recent movers include Jerome Colson, who is switching to BNP Paribas in Paris from Natixis, and Eric Huang, who is making the move to Barclays from Societe Generale. Colson had been with Natixis for 18 years, while Huang joined SG last year from NatWest Markets. Both are generalists, trading ABS and CLOs, and are expected to start their new roles in November.
The wave of moves seems to have kicked off around June, when Benjamin Cowley resigned as head of European CLO trading at Barclays. Rumours circulated at the Global ABS conference in Barcelona that month that he had decided to retire after making big returns investing in crypto assets. Cowley could not immediately be reached for comment.
Shortly after, the head of European CLO trading at Citigroup, Steven Tubb, left for a role at Jefferies, while Jefferies’ Ian Willis, who had been with the firm for 13 years, also upped sticks for pastures new.
‘No master plan’
The latest departures have left gaps that banks will scramble to fill with experienced hires from elsewhere, potentially creating a chain reaction that could go on into autumn.
“That population, as you know, manage and plan their own role moves to boost comp[ensation] for all,” joked a headhunter who specialises in capital markets.
One of the bankers who has recently accepted a new job, speaking on condition of anonymity, denied that they had orchestrated their moves together, though he admitted that frequent moves helped to boost pay. Others either declined to comment or could not immediately be reached.
“As Mario Draghi said, I don’t think there is a secret master plan,” said the banker. “It’s just that once you start to get one or two traders out of their seats, there are quite quickly more moves and everybody is axed. It allows you to lock in some compensation that you wouldn’t get if you didn’t move.”
(In fact, it was European Commission spokeswoman Pia Ahrenkilde-Hansen, not then-ECB president Draghi, who said there was “no master plan” to create a federal eurozone in response to the European banking crisis in 2012.)
The number of senior bankers on gardening leave means that some desks are short-staffed just as trading activity tries to ramp up following the summer slow-down.
“Maybe that’s the reason why it’s so quiet,” said a CLO trader. “The market was, in the last month, below average trading volume.”
Mixed fortunes
But while bankers have been very successful this year in the job market, signs are beginning to emerge that they may not have had such a good year in the bond market. Citi’s finance director Mark Mason recently warned that his firm’s trading revenues for the third quarter were on track to be 5%–9% lower than a year earlier, pinning the blame on weakness in securitised products. Citi later clarified that he meant spread products, a broader group that includes securitised products.
“I don’t think a lot of European desks have great numbers,” said the CLO trader. “The guys who had a light book in February, March or so had good luck but I think if you get out of this market with, let’s say, a red zero or a green zero, it’s the best you can do this year.”
Adds clarification from Citi in penultimate paragraph
