Wachovia Bank plans to build up its Asian credit derivatives presence and has hired Greg Donohugh, senior v.p. in fixed income at Lehman Brothers in Hong Kong, as a managing director in fixed income in Hong Kong to steer the effort. Donohugh told DW in an e-mail that Wachovia started increasing its distribution channels for asset-backed securities and collateralized debt obligations in 2000, but had put this on hold because of SARS.
Donohugh's hire coincides with the bank getting a securities license in Hong Kong earlier this month, which will allow it to trade fixed income products in Asia. It had previously traded regional instruments out of the U.S. In addition, Donohugh thinks other firms may scale back as interest rates rise and fixed income volumes fall, he argues that this will give Wachovia an opportunity to hire good quality staff.
Some rivals were surprised about Wachovia's decision to build up in the region and questioned its chances against more established players. Donohugh said Wachovia's advantage will be in its organizational structure. He continued that many firms operate in silos across product lines that do not interact with each other, for instance one unit may focus on CMBS, another on flow deals, and one on CDOs. Wachovia, however, puts all these in a single group and that allows it to respond more rapidly to client requests, explained Donohugh.
