The business will take in flow securitization, portfolio financing, infrastructure, project finance, CLOs and other areas, and straddle primary and secondary markets.
The intention is to have dedicated sales, trading and syndicate — but for these to be managed as part of broader functional reporting lines. The team consists of everyone involved in origination and structuring, warehousing, syndication, sales, trading, research and secondary financing for asset finance and securitization businesses.
Christophe Rousseau will head the operation for EMEA. Salvner, the global head, reports in this role and his other roles to Martin Egan and Benjamin Jacquard.
Despite reports that the firm was planning to cut its 35-strong London-based securitization team in half, many of the bankers involved will probably be redeployed into the new team, though likely with different job titles and responsibilities.
BNPP plans to grow the operation in certain areas, with particular focus on growing in US ABS, global CLOs and financial sponsor-driven portfolio finance.
Loan origination for activities such as infrastructure and transportation finance will remain outside the group, but when deals are structured for capital markets distribution (even if not in a traditional securitization), that will happen through the new AFS operation.
The integrated approach to running a securitization business is gaining ground. On Monday, HSBC announced a formal joint venture between the credit financing and flow financing businesses in its markets division and the asset-backed finance business in banking.
Sociéte Générale also carved out a joint venture in asset backed products recently, hiring aggressively in the US, where it made two team hires from the closing RBS franchise. Deutsche Bank, however, shut down its separate structured finance fiefdom in November last year, as part of a wider bank reorganization.
Unlike the Deutsche Bank operation, BNPP’s asset finance division remains closely integrated with the rest of the firm. The platform, in other words, is a “perimeter” around certain individuals and functions, not a silo. It also sits entirely within global markets, rather than being jointly run with banking as at HSBC and SG.
Regulation, particularly in Europe, remains relatively damaging to the securitization business, but that does not necessarily mean it’s a bad time to expand in the area.
While BNPP plans to expand, other firms have axed parts of their operations — Credit Suisse closed its European secondary ABS business and has been selling off CLO positions since it announced its restructuring in October last year.
"Financing assets for clients in the capital markets and through lending is a core activity for BNP Paribas, and growing these securitization and asset finance activities over the coming years is a top priority for the bank," said Salvner. “Positioning BNPP as a leading provider of asset financing solutions to clients builds naturally on the bank’s strong global reputations in both credit and creative structuring.”