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Derivatives

UBS To Create Cross-Rates Business

UBS Warburg plans to set up a cross-rates business in Stamford, Conn. and London as part of a move to increase its distribution of interest-rate derivatives. Rafael Geys, managing director and global head of fixed income derivatives marketing and structuring in London, said the cross-rates business would offer a package of risks made up of swaps, agencies and government bonds that can be traded and sold from a single desk. Currently UBS clients have to call separate desks to trade each asset class, but the new desk will give them one point of call and allow them to reallocate their positions more quickly, Geys said.

The need to create the desk has been prompted by a realization that the derivatives market is growing rapidly and UBS' clients, specifically asset managers, are increasing looking to use swaps as a transition tool for their investments, Geys said. "The new desk will also help bridge different people in our groups that handle different clients," he added.

Michael Ice, chairman and chief executive officer of RealMetrics, a real estate portfolio software company in Rye, N.Y., who joined UBS as head of North American interest-rate derivatives marketing and structuring at its Stamford office earlier this month, will head the desk. He reports to Geys. Ice did not return calls.

Geys said UBS is now reassessing its operations in the U.S. and London to see how its staff, about 16 derivatives professionals and 16 professionals in its government trading group, can be restructured to fill new roles as part of the cross-rates team. "We are currently assessing our many resources on our government and agencies desks and then we'll see what's missing," Geys said. He added that UBS is likely to hire another senior interest-rate head as part of the expansion.

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