Search results for

Lehman Brothers has hired Inna Raiskin White, v.p. and fund derivatives structurer at Deutsche Bank, as its first dedicated fund derivatives structurer in the U.S. Jean-Marc Spitalier, head of fund structured products at Lehman in London, explained that the firm has developed a fund derivatives business in the U.S. through its existing marketing team, but does all the structuring out of London. Now that demand has grown, it makes sense to have a staffer on the ground, according to Spitalier.

FundPartners is considering developing structured products on funds of hedge funds after winning a mandate to manage a hedge fund portfolio for a Dutch pension fund. The asset manager has had its eye on developing guaranteed products on hedge funds for some time (DW, 1/28/02), but the EUR100 million mandate from Stichting Pensioenfonds TNO should give the group a leg up on this goal as it could lead to more institutional money, said Jurcell Virginia, head of alternative investments at FundPartners in Laren, the Netherlands.

Seoul-based Hana Bank, with over KRW76 trillion (USD63.7 billion) in assets, is looking at investing in synthetic collateralized debt obligations for the first time as a way to boost yield for its investment portfolio. "This could help us pick up yield," said H.B. Kim, derivatives dealer. Kim continued that the firm is now studying such products and could enter the market within three to six months, likely for a CDO that encompasses a mix of Korean and foreign credits. "I'm calling them immediately," said a fixed income sales specialist at Crédit Agricole Indosuez.

The Man Group has launched a capital guaranteed product that uses a leveraged constant proportion portfolio insurance (CPPI) structure. This enables the fund to leverage itself to purchase zero coupon bonds with borrowed money when it is first launched, which allows more of the capital to be invested in the underlying assets, explained Gilbert Dunlop, head of product engineering in London. The advantage of this is that it prevents the fund from having to move its assets into cash securities as quickly as a traditional CPPI structure if there is a steep decline in the underlying.

Mizuho Bank has hired Yannis Matsis, managing director and global head of credit derivatives at ING in London, to set up a credit derivatives desk for clients. The firm will offer all forms of credit derivatives, including default swaps, credit-linked notes and first-to-default baskets, according to an official familiar with the plans. Matsis will report to Marc Petrocochino, head of trading in London, both of which declined comment.

Headstream Asset Management envisages buying and selling equity options in its recently launched Headstream Value Partners hedge fund, a long-biased equity fund. Bill Ward, partner in Dallas, said the asset manager will consider trading puts and calls to hedge positions, as well as to speculate.

Commerzbank Securities plans to replace several staffers who have left the firm's U.S. and European offices in droves in recent months. Sam Gottesman, co-head of fixed income sales in New York, said the firm is working to both restaff and broaden many of its business operations. He declined to specify the areas the firm plans to beef up, although he noted the firm is in the process of hiring for structured credit, hedge fund sales and third-party distribution.

The valuation of a credit derivative depends on the risk of default of the reference entity and, in many cases, the rating of the protection seller, including its default correlation with the reference entity. Protection against a Mexican corporate default is clearly more valuable when the seller is the World Bank than a BBB Japanese bank, which, in turn, is more valuable than a BBB Mexican bank. But how much should the protection cost if it is bought from the corporate itself?

Renault has entered a foreign exchange swap on a recent EUR750 million (USD857.18 million) bond offering to convert it into a synthetic yen-denominated obligation. François Schwartz, deputy senior v.p. of finance in Paris, said the company wanted to match a seven-year fixed-rate yen-denominated asset with a similar liability, but it is easier for Renault to issue in euros. "We don't think it is easy to tap the Japanese market for such long-duration [obligations]," Schwartz said. The swap matches the bond's seven-year maturity.

Several U.K. power trading shops, including Innogy, Accord Energy and Entergy-Koch Trading, and broker Spectron, are looking to forge an electricity swaps market. John Evans, director of business development at Spectron in London, said it has met many of the leading energy trading firms recently to agree standardized rules and indices.

"With spreads tight, investors have no choice but to think about new products."--Mahesh Bulchandani, managing director and head of structured credit products at JPMorgan in Tokyo, commenting on investor appetite for collateralized debt obligations referenced to asset-backed securities. For complete story, click here.

Wachovia Securities has hired John Van Poznak, managing director in equity derivatives at Credit Suisse First Boston in New York, to head its listed options and exchange traded fund sales business, which structures trades using over-the-counter derivatives. Todd Steinberg, managing director and head of equity linked products in New York, to whom Van Poznak reports, said the hire is part of Wachovia's plans to expand this activity (DW, 2/23), and in so doing extend its product offering for institutional clients.