Lehman Brothers is setting up an emerging markets coverage group specializing in derivatives-based structured products and has lured Rajeev Tewari, managing director in the emerging market coverage group at Credit Suisse First Boston in New York, to head the venture. The desk will initially focus on Latin America. The new desk will structure and market fixed income derivatives including hybrid interest rate, credit and foreign exchange products for clients such as corporates, said officials familiar with Lehman's plans. Tewari and Kerrie Cohen, spokeswoman in New York, declined comment.
Lehman is one of the few major derivatives shops not to already have a derivatives structuring group for Latin America, according to market professionals. One rival said Lehman could pose a threat to more established players if it gets the right team in place, and Tewari could be the man for the job. "Tewari is a bright guy and has a lot of experience in this area," he noted. As investors scramble to find higher yields, many are turning to emerging markets, which makes this a good time to develop the operation, added one market official.
In spite of this, however, derivatives houses are increasingly being challenged in their Latin American business lines by regional players that have a strong geographic footprint in the region, noted one observer.
At CSFB, Tewari reported to Frank Lopez, managing director, who did not return calls. John Gallagher, spokesman at CSFB in New York, declined comment.