bw.gifRBS Greenwich Capital is creating a full-scale structured credit business in the U.S. and has hired Romita Shetty, former head of structured credit at J.P. Morgan Securities and a pioneer of the market. The firm currently has only a cash-flow collateralized debt obligation franchise and wants to expand its capabilities to include all kinds of structured credit and equity products, according to a firm official. Shetty, who starts at RBSGC later this month, will co-head the group along with Fred Matera, head of the CDO business. They both declined comment. RBS has also hired Sanjeev Gupta, global head of credit derivatives at Credit Suisse First Boston in London, to run structured credit trading. He could not be reached by press time.
The effort marks a dramatic shift for RBSGC, which currently has zero presence in the credit derivatives market and does not even offer single-name default swaps to customers, the firm official continued. Once the new business is up and running, RBSGC plans to offer exotics such as portfolio credit derivatives and contracts related to alternative investments such as hedge fund performance. It will also offer so-called structured solutions for corporates. "It's a really big buildout," the firm official added.
For Shetty, the move is also a return to the working world. She left J.P. Morgan as head of global structured credit products in January of 2003 to take maternity leave and never returned. While there, she had a hand in several innovative transactions, including the creation in 1997 of BISTRO, the first large credit derivative securitization. Shetty also presided over the first CDO squared, ZING I, in 1999, and the first collateralized fund obligation in 2002. One rival said Shetty's hire brings RBSGC some instant clout. "J.P. Morgan was so big in derivatives and she ran it," he said.
The hiring of Shetty comes a few months after John Walsh, head of investment-grade bonds at Credit Suisse First Boston, joined RBSGC as head of North American capital markets this spring. "This was in the cards as part of [Walsh] coming aboard," the official added, referring to the structured credit business. Shetty and Matera will report to Walsh, who did not return a call by press time.
