Swiss Re is to launch into credit structuring, particularly CDOs, in Asia on the back of setting up a desk in Hong Kong. "CDOs are the main driver, but we're open to all potential derivative products," said Xin Fu, v.p. in Hong Kong. Fu and Jack Vogel, managing director, transferred to Hong Kong from New York this summer to establish the desk. "There's a lot of potential growth in Asia, including Japan, and we expect to close our first CDOs as well as hire additional staff before the middle of next year," added Fu.
Increasing acceptance of credit derivative products in the region as well as regulatory easing in such markets as Taiwan, which has opened its insurance sector to CDO deals, led Swiss Re to the desk. Fu noted that in addition to structuring credit deals, the team will also look at making markets and potentially buying existing outstanding CDOs from clients, which separates the firm from much of the competition in the region. Vogel did not return calls by press time.
Rivals said Swiss Re should be able to carve out a niche in the market given its large balance sheet, strong credit rating and ability to buy deals for its own book.
