Broker To Build Weather Team, Plans London Office
Evolution Markets, an emissions brokerage firm in New York, plans to make a move into the weather derivatives brokering business in New York and open a London office.
Andy Ertel, president, said he believes there is still a lot of growth potential in weather derivatives as more end users become familiar with the product. "They've at least read about it once somewhere," he said, adding that liquidity and trading in the market has grown.
Ertel said he would like to hire a mid- to senior-level staffer to head its new weather product line on either the brokerage or marketing side within the next 60 days. Evolution plans to build a team of two to four in New York. The firm has already brokered two weather transactions.
The broker also plans to have a permanent presence in all of its product lines, including coal, emissions and greenhouse gases, in Europe by year-end through the addition of a London office. The brokerage also has a greenhouse policy and risk advisory group. Although the office in London would initially be a start-up operation, Ertel said in the next two to three years he could see it growing to a 20-30 person operation. Part of the plan is to have a two- to four-person weather derivatives brokering business based in London, Ertel added.
An official at a competing firm commented that there is an abundance of competition in weather derivatives brokering, including a large number of firms with a well-established presence. "I would want to ask what exactly are they going to bring to the playing field?'," he said. Ertel answered that by saying Evolution's deep roots in the brokering community, established relationships with end users and product structuring expertise will give it an edge.