Credit Lyonnais is establishing a multi billion-dollar fund that will invest in the high-yield, investment-grade and credit-derivatives markets in the U.S. and Europe. The French bank, which does not currently have a significant presence in those products in the U.S., has hired three investment-grade traders from Deutsche Bank and a senior credit derivatives salesman from Merrill Lynch to manage the fund, according to fixed-income officials with knowledge of the group's plans. The fund, which will launch in May, will start with at least USD5 billion to build a global investment platform across all credit products, and will include trading desks in New York and London. The group will report to Omar Abukhadra, global head of credit markets and credit derivatives, who could not be reached. Once the group is in place, it is expected it will make additional senior hires, including analysts.
The group will be led by John Botti, who resigned last Tuesday from Deutsche Bank in London, where he was a managing director. The other investment-grade traders leaving Deutsche Bank are New York-based Keith Lombardo, a director, and Bill Mehleissen, assistant v.p. They handed in their resignations last week. Both declined comment. Alex Koundourakis, v.p. and senior salesman at Merrill who will also join the group, declined comment. He will leave Merrill at a later date. Lombardo reported to Mark Jicka, head of investment-grade trading at Deutsche Bank, who declined comment. Koundourakis reported to Frank Corcoran, head of investment-grade sales at Merrill Lynch, who did not return calls.
