Americas Credit Derivatives House of the Year: Barclays
For the way that it has taken its traditional strengths in credit trading to build out a full-spectrum derivatives business underpinned by investments in people and technology, Barclays is our Credit Derivatives House of the Year.
Barclays has long enjoyed a reputation for its expertise in credit trading, consistently going head‑to-head with the top six banks in the US over the past decade. Over the past three years, however, the competitive gap has started to narrow, thanks to the firm’s continued and sustained investment in people, processes and technology, according to Barclays’ co-heads of US credit trading, Drew Mogavero and John Cortese.
“Everything is starting to come together,” says Cortese. “Derivatives have always been part of the firm’s DNA, and that is evident in every aspect of our global business.”
The firm’s commitment to a wide range of credit products has helped enhance liquidity across the trading platform. In cash loans, for instance, Barclays has been a top tier player for many years, so when investors started wanting broad exposure to the asset class via loan ETFs and loan TRS, it worked with equity and portfolio trading teams across the bank to deliver the right infrastructure. “Having now added loan TRS to our existing expertise, we’ve got all of the tools in the toolkit for our loan clients and loan business to do what they do best,” says Mogavero.
Another example is in the CLO/CLN market, where repacks provide another outlet for risk. “Whether that risk becomes a derivative hedge or a bond trade, by having built the technology we can bring in-house trades that we might previously have done with competitors,” says Cortese.
While the firm has invested in putting the technology in place to deliver the full suite of solutions — what Mogavero calls the common denominator under its flow and solutions businesses — it has also invested in people. Desks such as high grade CDS, for instance, operate with a team of four in the US, rather than the one or two at other large banks. “We have hired, trained and retained top-notch talent in each of our trading seats to build out this team globally and across all products,” Cortese says.
The long-term effort involved in the build-out has left the firm in a good place. “As the markets become more volatile, clients will look to Barclays as a trusted partner when expertise is needed,” says Mogavero. “No matter how you trade, or what you trade, it comes down to core understanding of the credit, which is why I am confident we will excel in the years ahead. Our trading is deeply rooted in research and core credit knowledge, and I truly believe that is how we will continually deliver for clients in the years ahead.”