Nomura is building up its U.S. fund-linked derivatives business after hiring Andrew Scherr from Fortis Prime Fund Solutions earlier this month. The firm has been selling fund-linked investment notes and offering financing in the U.S. from its London office, but has not previously had a fund-linked sales or structuring presence in New York.
Scherr, who joined as a director in fund-of-fund origination, said trading and risk management will initially be handled from London, with legal aspects of the business split between New York and London. The firm already has offshore and onshore U.S. fund vehicles established and will use U.S. credit lines. He declined comment on how many more sales or structuring officials the firm may hire. "The mandate within Nomura is aggressive in terms of building a team, but we are trying to balance that with making sure the deal flow can support it," he explained.
Fund-linked finance and investment product structuring is competitive in the U.S., but Scherr said the firm will differentiate itself with its speed of execution and product knowledge. The firm has built up expertise in constant proportion portfolio insurance on funds, and Scherr believes there are opportunities for this in the U.S. as well as Latin America.