Three of the biggest names in credit derivatives, who are also Merrill Lynch alumni, are clubbing together to start a structured credit products boutique. The structured credit 'dream team' of T.J. Lim, ex-global debt capital markets coo, Glenn Barnes, former European head of structured credit, and Kevin Krespi, ex-head of debt for the Pacific Rim (DW, 7/7), are setting up an advisory firm called New Smith Financial Solutions. Lim, Barnes and Krespi declined comment.
The boutique, which is likely to be up and running in the fall, will offer clients, such as corporate treasurers, independent advice for one-off transactions. Lim, Barnes and Krespi's skills are creating structures and innovative ways for corporates to remove or sell non-core assets to repair their balance sheets, and this is likely to be the firm's largest revenue generator, according to bankers.
Similar firms have been set up in the corporate finance and merger and acquisition arena, which were hugely profitable in the bull markets, but this project is thought to be unique in the structured credit area. Moreover, highly publicized corporate malfeasance, investment banking fraud and major staff cuts from the large derivatives houses mean traditional investment banking clients are looking for alternatives, according to one market official.
In addition, Paul Roy, executive v.p. and co-president of global markets and investment banking, Michael Marks, executive v.p. and executive chairman of Europe, Middle East and Africa, and Stephen Zimmerman, senior v.p. and co-chief operating officer of Merrill Lynch Investment Management, are founding New Smith Capital Partners that will likely, among other things, act as advisors to New Smith Financial Solutions.
