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Morgan Stanley has combined its equity derivatives sales teams servicing hedge funds and asset managers in the U.S. Tom Levy, head of European equity derivatives sales in London, has transferred to New York to head the American division. Levy referred calls to Mark Lake, spokesman, who declined comment.

"We won't do anything too exotic until we figure out how liquid the indices actually are."--Yin Wu, head of equity derivative sales at Rabobank in London, commenting on the bank's plans for derivatives referenced to a hedge fund index. For complete story, click here.

Salomon Smith Barney is close to completing its first managed mezzanine synthetic collateralized debt obligation in Asia. In the USD500 million five-year deal investors in the mezzanine notes will be able to rebalance up to 10% of the portfolio each year. "The recent deterioration in 'investment-grade land' and the underperformance of some managed deals, [means] some investors feel they can manage their investments more effectively themselves," said James Lee, managing director and head of Asia-Pacific CDO markets in Hong Kong. Investors have full control in selecting the credits in the initial portfolio.

UBS Warburg is bringing aboard Haitong Wang, a marketer at Goldman Sachs in Hong Kong, in a similar role covering China fixed income derivative products. Wang, who starts later this month, will report to Philip Tsao, managing director and joint head of the Asian debt capital markets group in Hong Kong, according to Mark Panday, spokesman at UBS. Tsao, who also joined from Goldman Sachs (DW, 1/28/02), declined comment.

Threadneedle Asset Management is likely to use interest rate and credit derivatives for its newly launched fixed-income hedge fund, called the Crescendo Credit Fund. Robert Stirling, head of fixed income at Threadneedle in London, and lead portfolio manager for the fund, said it has the capacity to use any type of over-the-counter derivative. Specifically, it is likely to use interest rate swaps to manage the fund's overall interest rate curve exposure and would also use credit default swaps to hedge credit risk and may use them to take positions.

SwapsWire, a company that provides trade capture and confirmation for interest rate swaps, plans to expand the range of products it can process to include credit-default swaps and equity derivatives. The move could dramatically reduce the number of trades with errors, such as the wrong reference entity, and therefore reduce operational risk, according to traders.

Newly minted alternative investment manager Ash Capital envisages buying and selling over-the-counter equity options in its soon to be launched Empyrean Fund, a long/short equity hedge fund employing quantitative and fundamental analysis strategies. Rauf Ashraf, managing director in Boston, said the firm will buy and sell calls and puts on an opportunistic basis. The fund, which will launch with seed capital of USD25USD35 million, will invest across industries, he noted.

Banc of America Securities has hired Ron Juster, a longtime agency trader, according to people close to the situation. Juster was dismissed from J.P. Morgan Securities last summer for allegedly mis-marking the firm's book of callable agencies (BW, 8,11). Reached at his residence, Juster confirmed the move, but declined further comment. Calls to Kurt Harrison and Brain Edmonds, the coheads of the U.S. Treasury and agency desks at the firm, were not returned by press time last Friday. Juster will report to Frank Keen, head of the agency trading desk. He will be a flow trader in callable agencies, according to an individual familiar with the situation.

Deutsche Bank has hired Mike Reisman from Morgan Stanley to run its U.S. government bond repurchase trading desk. It's a new position. Reisman, who will start after his non-compete expires on March 27, will report to short-term trading head Joe Randozzo. Reisman, reached at his residence, said, "I left for a hell of an opportunity and wish Morgan only the best." He declined to discuss the move further. A Deutsche Bank govvies official familiar with the move says Reisman's hire comes at a time when the repo market is suffering from "sticker shock," relating to the low yields across the curve. As a function of this, one of Reisman's jobs will be to expand the customer side of Deutsche Bank's business, as it makes a grab for increased market share. He will also coordinate the repo desk's actions with other desks, such as Treasury trading and swaps.

BondWeek is the leading news publication for fixed-income professionals, covering new deals, structures, asset-backed securities, industry and market activity.

BondWeek is the leading news publication for fixed-income professionals, covering new deals, structures, asset-backed securities, industry and market activity.

BondWeek is the leading news publication for fixed-income professionals, covering new deals, structures, asset-backed securities, industry and market activity.