Goldman Sachs has integrated its U.S. investment-grade bond and credit derivatives trading desks with its convertible-bond trading operation and tapped Gregg Weinstein, managing director and global head of convertibles, to oversee the enlarged unit. The three businesses will be able to work more closely together under the new structure, according to one official. Weinstein declined comment. Goldman combined its credit and convertible bond teams in Asia last year (DW, 10/27/02). A similar move for Europe is under evaluation, the official added.
Derek Smith, managing director in credit derivatives trading, and Paul Huchro, managing director in investment-grade bond trading, continue to head the respective trading desks, but now report to Weinstein, said the official. Smith previously reported to Ron Tanemura, global co-head of credit derivatives in New York. Bruce Corwin, spokesman in New York, declined comment.
While several firms have integrated their bond and credit derivatives desks fewer shops have aligned their convertible bond desk with their credit operations so closely, noted one observer. The closer alliance makes sense because convertible bonds, in part due to arbitrage funds buying the bonds and using default swaps to hedge the credit risk, have started to have a larger impact on the credit markets. The firm, however, is keeping the converts group within the equity department and is running the combined credit group as a joint venture.
