Banc of America has hired Dik Blewitt, chief strategic officer at creditex in New York, as a managing director in its structured credit products group. Blewitt said he is structuring credit products for pension fund and insurance clients in the U.S. The appointment was a strategic hire by the firm rather than part of an expansion of the department. "It is a homerun in terms of opportunities," he quipped, referring to the firm's large balance sheet and global client base.
There were no hard feeling between Blewitt and creditex, according to both parties. "I hope they do well," Blewitt said, adding, "I have still got stock [in the company]."
Blewitt thinks pension funds will be one of the next growth areas among end users of credit derivatives and part of his job will be structuring credit products that the funds can use for investing and hedging. He expects to see more pension funds invest in the equity and mezzanine tranches of synthetic collateralized debt obligations because these have an equity-like performance with many debt-like characteristics. He also expects pension funds to increase their use of the products for tax and ownership purposes. For example, a fund could use credit derivatives to give deferred payments the same tax advantages and security that a defined benefit pension plan enjoys. He reports to Charles McLendon, global head of structured credit products in New York. McLendon did not return calls.
Sunil Hirani, co-founder of creditex in New York, said Blewitt would not be replaced. His responsibilities have been spread throughout the rest of the team.