Credit trading businesses didn't have a great third quarter. Most banks don't break out their credit trading revenues, but at those that do, credit trading desks had a hard three months: at Barclays, credit trading revenues were down 22% year-on-year in the third quarter; at HSBC, credit trading revenues were down 15%. On this basis, the three months to October don't look like a great backdrop for hiring, but hiring in credit is happening all the same.
Deutsche Bank's just picked up Rebecca Klausen, a credit trader who previously spent seven and a half years at shrinking hedge fund Moore Capital. Klausen joined this month as a Central Eastern Europe Middle East and Africa (CEEMEA) strategist in the London office. Last month, Deutsche also bolstered its U.S. credit strategy team with Dominic Gurney, a director level hire who previously spent over 13 years at Goldman Sachs.
Nomura is continuing to build its credit business too. And ever since it appointed former Citi veteran Wissam Farah as head of EMEA global market sales in October 2016, Citi has been Nomura's preferred poaching ground. In July, Nomura appointed Fred Jallot, the former head of EMEA trading and structuring at Citi as its EMEA head of global markets. Now, we understand that it's also picked up Omar Ghalloudi, the former head of investment grade credit trading at Citi, who left the bank in August. Frederic Giovansili, Citi's former head of French markets, is also understood to be setting up a new credit trading desk for Nomura in Paris.
"There's a late wave of hiring in credit," says Russell Clarke, founding partner of Figtree Search in London. "On one hand, you have banks with spaces to fill. On the other, you have traders who are afraid they won't be paid. It's creating a lot of liquidity in the market."
Nomura and Deutsche aren't the only ones recruiting. Standard Chartered is also recruiting under Roberto Hoornweg, its head of financial markets who was hired from Brevan Howard last December. Goldman Sachs has made credit hiring a priority after mistakenly cutting 30% of its credit sales and trading headcount between 2012 and 2017 and Citi has plenty of Nomura-inspired gaps to fill. - It's recently understood to have hired Paras Shah, a former high yield credit trader from HSBC, for example.
In any normal year, banks might wait until bonuses have been paid in the first quarter to poach from rivals. But headhunters say this isn't a normal year. "You have banks that are trying to rebuild and banks that are trying to reinvigorate their risk taking," says one, speaking off the record. "It's a perfect storm," says another. "The credit business is likely to normalize next year as the ECB tapers, and credit talent relative to desk strength is likely to be cheaper this year than next. Banks are trying to upgrade while they can, and traders are trying to position themselves now for the market in 2018."
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