Goldman Sachs is setting up a proprietary trading operation that will take positions in structured products including collateralized debt obligations and has tapped Greg Mount, global head of CDOs in New York, to head the desk. Bruce Corwin, spokesman in New York, said Goldman does not comment on proprietary operations. Mount did not return calls.
The move comes as a flood of competitors race to bring structured credit trading operations to fruition, albeit in formats varying between prop desks, hedge funds and principal finance groups. CDO houses are starting to look at this area because a secondary market is developing as more investors attempt to sell their positions. Banc of America Securities (DW, 10/5) and Merrill Lynch (DW, 8/3) are among the recent upstarts chasing opportunities in this arena, while firms such as Deutsche Bank's Winchester Capital Principal Finance have been established for around a year (DW, 11/24).
Taking positions in structured credit, including synthetic CDOs, is becoming an increasingly crowded space, noted officials. The firm's risk appetite and reputation as a trading house will also aid the operation, added an official.
