Equity Derivatives: Americans Expanding in Europe

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Bank of America, Wachovia, Merrill Lynch and JPMorgan are likely to be among the banks adding to equity derivatives teams this year.

"Equity derivatives picked up last year and is likely to remain strong in 2006," says Jeremy Kemp, a partner at search firm Highland Partners in London.

Bank of America hired eight traders and salespeople to its London equity derivatives team in September 2005, but Kemp says more hires are likely. Yann Le Garrec joined the bank in September from JPMorgan as head of marketing for EMEA corporate equity derivatives and equity products, and is expected to hire more to his team, for example.

"We are also getting some pretty strong signals from the US that Wachovia is looking at getting into the European equity derivatives market," says Kemp. "They will have been interested to see their archrival Bank of America moving into this space in Europe," he adds.

Equity derivatives recruitment at Merrill Lynch and JPMorgan is likely to replace staff losses at both firms. However, Kemp says JPMorgan, which today announced a shakeup of its securities business, is liable to see more staff exiting after bonuses have been paid.

"The latest shakeup at JPMorgan could encourage more departures," says Kemp. "Historically, JPMorgan used to have quite a stable derivatives platform," he adds. "But once the cracks start to appear it becomes easier for other banks to pull people out."