Merrill Lynch is setting up a global equity structured products group to be based in New York and is sending Brent Clapacs, managing director and head of equity trading for the Pacific Rim in Hong Kong, to the Big Apple to head the venture. Michael DuVally, spokesman in New York, said the group is being formed to expand Merrill's share of the global structured equity derivatives market. DuVally declined to specify the firm's current share. By dedicating a specific group to the development of structured equity products Merrill envisages expanding both its origination and distribution capabilities for its global client base, he added.
While Merrill already offers structured equity products, the new structure will differ by bringing together staffers who may presently work in different departments, such as cash equity or convertibles, into one dedicated group, noted a Merrill insider. Details on the types of products to be offered have not yet been firmed because the group is in its formative stages, he added. New hires are expected but details are not finalized.
This is not the first time Merrill has forged a separate structured equity division, noted Merrill observers, having disbanded a different entity, Global Equity Linked Products (GELP), more than a year back. One Merrill insider explained that GELP was disbanded in Oct. 2001 when a reorganization took responsibilities for the group away from Rafael Berber, head of the global equity-linked group in London, and had structured equity divisions reporting on regional lines. A further reorganization last September changed the reporting lines back to having a global focus, with structured equity products again reporting into Berber, the group is being formed as a means of consolidating this structure. Berber referred calls to DuVally who declined further comment.
"[Clapacs'] got a good reputation," said an equity derivatives head at a rival bulge bracket house. Clapacs spent around three years in Hong Kong and two in Australia for Merrill after working at the firm in the U.S., said another Merrill insider. "It's quite a promotion," said one market official, noting that Clapacs is stepping up from a regional to a global role. He will report into Berber.
For Asia, James Rodríguez de Castro, managing director of global equity markets in Hong Kong, will assume Clapacs' responsibilities for equity derivatives trading for the Pacific Rim. De Castro said the regional responsibilities on the marketing side are still being ironed out.
Merrill's equity derivatives business has undergone a massive reorganization in recent weeks as it just slashed the size of its equity derivatives proprietary trading desk and pulled out of statistical arbitrage prop trading (DW, 1/13).
