Morgan Stanley is reshuffling its investment-grade and emerging market credit derivatives trading teams to meet increasing volumes and better grasp a deteriorating credit environment. Robert Breden, who had run the synthetic emerging market book from London, is in the process of moving to Tokyo where he will be co-head of Japanese and Asian credit derivatives trading with Richard Thomas. Nick Riley, who had been head of credit derivatives trading for Europe, Middle East & Africa in London, said he starts this week in Breden's old role, but will be based in New York. Breden and Thomas were out of the office and unavailable for comment.
"This is a pretty big restructuring," Riley said, adding the firm is moving some of its more senior credit derivatives pros into the investment-grade side as it is expanding quickest. Plus, traders who have experience with emerging market credits are well-equipped in a deteriorating credit environment, he said. "They're used to trading more volatile credits that are closer to default."
Riley will also run the Latin American credit derivatives trading effort, which he will take over from Srini Dhulipala, who starts this week as a trader on the firm's U.S. investment-grade desk, specializing in technology and telecom names. Dhulipala said he is looking forward to the move because the corporate default swap market is more liquid than the Latin American sovereign synthetic market. "I am moving from a world which is a little more illiquid to a world where credit derivatives are truly an alternative to cash markets for expressing credit views," he said.