Deutsche Bank is preparing to make a splash in the U.S. structured products market by building its staff, trading and structuring capabilities in the region. The German house will build on its global cross-asset class platform, the Investment Products Group, by hiring U.S. staffers and boosting its distribution lines, according to Noreddine Sebti, global head of equity derivatives trading in New York.
The shop will launch its U.S. drive by reinforcing its flow trading effort, said Sebti. Then, the plan is to work on reviving distribution channels and adapting its structured products business for the U.S. market. Sebti noted the different investment culture and regulation in the U.S. will be the two main issues Deutsche Bank will have to address. Other European shops have struggled to sell capital protected notes in the U.S. (DW, 1/7), where investors are used to taking single stock equity risk.
Sebti transfered from London last month (DW, 4/1) and is looking to add staffers to the U.S. derivatives group. Chris Yeagley will join from Merrill Lynch as a director and head of retail structuring. He will report to Tim Dowling, head of North American structuring. Sourav Sen joined as an associate in CDO structuring in February from Summit Partners in New York, reporting to Michael Lamont, co-head of the CDO group in New York. But several staffers have also left the house, including Matthew Carrara, managing director and head of the Americas for the global equity derivatives division in New York, and Karen Fang, a director in structured and investment products, who left in March (DW, 3/14). Deutsche Bank spokeswoman Michele Agostinho confirmed the hires and departures.
One Deutsche Bank watcher noted the bank has made attempts to build up its U.S. structured products effort in the past, but in recent years it has taken steps back. Brokerage arm Alex. Brown, bought by the firm in 1999 to boost its U.S. coverage, is no longer a name that draws in investors, said the official. The final test will be persuading U.S. investors to turn to structured investment products on a scale similar to Europe.