JPMorgan has established a credit and equity joint venture in Tokyo to offer hybrid structured products. The group will sit within the equity division and Clark Pitts, co-head of equities at JPMorgan in Japan, will spearhead the effort. Pitts declined comment.Mika Watanabe, spokeswoman in Tokyo, confirmed the initiative and said, "There is intense client appetite for more complex products that does not always sit tidily in one product area." He declined further comment.
The joint venture will structure derivatives that require expertise across asset classes, such as equity-default swaps, according to market officials. Equity-default swaps work in a similar way to credit-default swaps, but payout according to a share price trigger.
The derivatives house has hired Franck Raillot, v.p. in equity derivatives at Dresdner Kleinwort Wasserstein in Tokyo, as a v.p. to work in the hybrid group. Raillot was traveling and could not be reached.
Rivals said JPMorgan's move is part of a growing trend to diversify structured products and disseminate innovations throughout the firm more quickly. Several firms in Asia, including Credit Suisse First Boston (DW, 7/21/02) and Goldman Sachs (DW, 6/29), have set up similar cross-product ventures.
At Dresdner, Raillot reported to James Hong, co-head of equities in Japan. "Franck is an intelligent guy and a good trader, we're sorry to see him go but wish him the best of luck at JP[Morgan]," said Hong.
