Barclays Capital continues equities hiring spree
Barclays Capital, the debt-focused investment bank, is to continue building its new equity derivatives teams in a bid to become one of the top players in the fiercely competitive business.
The bank has been hiring aggressively over the past 18 months and has stepped up recruitment since Maurits Schouten was appointed head of equity-linked and equity derivative products in May last year. Schouten was previously global head of equity derivatives trading at Credit Suisse First Boston, but has a broader role at Barclays Capital, which includes fund derivatives, arbitrage trading activities and convertibles, as well as equity derivatives.
Schouten said: "So far we have built our trading team in Europe up to 55 from about 35 last year. In addition to that, we have another 50 or so staff specialising in equity-linked products, 20 of whom we hired last year. A year ago there we had just two people on the structuring side. Now we have 10 globally and are still hiring. This is one of the fastest growing areas for us at present."
Hassan Houari, head of equity derivatives structuring at Barclays Capital, said: "The structurers sit between the trading and sales functions, and have an important part to play in developing ideas and keeping lines of communication open. They also work internally educating staff elsewhere in the bank on our products, and allow us to build strong client relationships and increase the risk capacity of the bank."
The next step will see Barclays Capital expanding its equity derivatives coverage outside Europe. The bank plans to have a team in Asia by the end of the year, and to have up to five sales people in New York by early 2005.
Barclays Capital hired 15 people globally for its equity derivatives operations earlier this month. Most of the new staff are based in Europe, and will work on the bank's European investor solutions team, which develops products for institutions to distribute to retail clients.
The new hires include Guido Contesso, who joined from Deutsche Bank to cover Italy; Mark Higgins and Xavier Garcia, who joined the bank from Société Générale, and cover Scandinavia and Iberia respectively; Uwe Becker and Thomas Fleck, who joined from Crédit Lyonnais and cover Germany; John Elalouf, who joined from Exane, to cover France, and Colin Dickie who joined from Keydata, to cover the UK. Barclays Capital made another two hires in April, appointing Regis Loeb as head of European index options trading from Credit Suisse First Boston, and Mohamed Yangui who joined as equity derivatives structurer from Crédit Lyonnais Securities in London.
Schouten is confident the bank's hiring spree will pay off. He acknowledges that Barclays has to position itself differently to competitors, as it does not carry out block or programme trading of equities. Schouten believes this is a benefit, as the bank does not have to support the low margins on this business. He said the bank's small market share in equity derivatives is a challenge, and leaves plenty of room to grow.
Barclays Capital faces intense competition in the potentially lucrative business. It will have to develop a franchise and reputation to enable it to compete not only with the market leaders, such as Société Générale, BNP Paribas, Deutsche Bank and JP Morgan, but also boutiques, such as XBZ, and other banks taking a renewed interest in the market.
Houari said: "The newcomers can be difficult to deal and compete with, as they will often aggressively price trades to win business. We saw a lot of this last year in large retail product transactions - some banks were very aggressively pricing the correlation and pricing the volatility convexity of products - but fortunately, and as a result, we have also seen them exit the market."
