Equity derivatives is still hot(ish)

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While other business areas are in the recruitment deep freeze, equity derivatives haven't been doing too badly in terms of hiring or firing. Last week, Barclays Capital announced the appointment of Yannick Mallegol as head of equity derivatives flow sales, and the summer saw a number of equity derivatives moves, including Mark Pringle to Citigroup, and Gareth Curran and Harald Epple to Credit Suisse. Even Commerzbank, which has promised to decimate Dresdner Kleinwort's structured credit business, has declared an intention to keep the equity derivatives franchise relatively intact.

Denis Frances, global head of equity derivatives flow sales at BNP Paribas, says he intends to invest in staff 'selectively' over the next six months, and that demand for OTC equity derivatives products should continue to grow in Europe, emerging markets and Japan: "A lot of clients are balancing their portfolios. US hedge funds, in particular, are increasingly looking at Europe."

Equity derivatives professionals say they're still being called by headhunters. Equally, headhunters say banks are still interested in bolstering equity derivatives teams - although few moves are likely to take place between now and the end of the year.

"Standard Chartered entered the business on a larger scale, hiring key people from the now-defunct Bear Stearns, and Nomura and Tokyo-Mitsubishi have also been gearing up," says Jeremy Kemp, of equity derivatives-focused search firm Jeremy Kemp International. "Senior management at several houses still see equity derivatives and related areas as key revenue providers in 2009."

However, equity derivatives teams aren't likely to escape the cuts entirely. Other headhunters say teams have already been trimmed at Citigroup, UBS and Morgan Stanley. Frances says clients are favouring houses with strong counterparty credit ratings, good risk management and a large structuring capability, and that new entrants to the market are struggling.

Headhunters predict that junior equity derivatives staff, and sales teams focused on retail and corporate clients, could find themselves targeted for redundancy before the year ends.