The Royal Bank of Scotland has hired four staffers to form an equity prop trading group. The team will be led by Anthony Medina of hedge fund Trebax Capital Management and formerly Ferox Capital Management (DW, 12/13). The initiative is due to get under way early next month, with trading starting shortly afterward. It will be multi-strategy, initially concentrating on volatility arbitrage, risk arbitrage, special situations and relative value strategies.
Joining Medina are Vincenzo Di Gennaro, also formerly of Trebax and Ferox, and Steve Lamberton and Gerald Foo, previously with UFJ International in London. The capital at the new team's disposal could not be determined by press time. Di Gennaro and Medina did not return a call, and Lamberton and Foo could not be reached.
RBS has been slowly building in equity derivatives with sales and trading hires over the last year. One equity derivative official at a rival firm said the move was surprising for RBS because it is a significant venture outside of its current sales and hedging activity. But one official close to the venture said RBS has taken a good opportunity to get Medina and co. on board, as they are well-regarded in the market. Medina and Di Gennaro started out at Lehman Brothers and Di Gennaro sports a brief spell at Commerzbank on his resume.
It could not be determined what will happen to Trebax, set up earlier this year by Medina and Di Gennaro. This year has been hard on startups, and the last two years have been tough for volatility funds in particular, noted the official. Medina and Di Gennaro may have decided the support of a larger financial institution is a boon when starting up a prop trading effort, speculated the official.
UFJ will not replace Lamberton and Foo because of its merger with Mitsubishi Trust and Banking Corp., said an official.