CDOs power ahead but RMBS hiring may falter

eFC logo

UBS is preparing to add collateralized debt obligation staff (CDO) in New York, London and Asia according to a news report.

Securitisation News says the Swiss bank is understood to be looking for between four and six origination and structuring professionals for its 12-strong New York-based CDO product development group. In London, it is said to be looking for a senior structurer and quantitative analyst to join an existing team of four. An unspecified additional number of staff may also be required for Japan, Hong Kong and Singapore.

Jim Stehli, global head of CDOs at UBS, is quoted as saying the additional hires are required to research and develop new products in the CDO market, but recruiters say they are more down to the fact that UBS pulled back from the CDO market in 2003 and is now having to rebuild.

News of the recruiting spree matches headhunters' consensus that the market for CDOs market, which allow banks to distribute tranches of securitisations according to risk, is hot. Hiring for synthetic collateralized debt obligations, based on underlying credit derivative products, is particularly sweltering.

"Client demand for synthetic CDOs remains strong and therefore banks are hiring to support a strong pipeline," says Russell Clark, a director at London-based recruiter Mantis Partners.

Morgan Stanley is also understood to be recruiting in the CDO arena, while Bank of America, which has recently lost its head of European structured credit trading and a director of credit-default swap trading, will also need to hire.

Hiring activity in the synthetic CDO market may coincide with an imminent recruiting downturn in the previously buoyant US commercial mortgage backed securitisation (CMBS) market. Bloomberg reports Lehman Brothers and Goldman Sachs as saying that revenue from mortgage bonds in the U.S. is dropping as rising interest rates depress home sales in the country.

Deutsche Bank has been building its US CMBS business, while SG CIB, the investment banking arm of French bank Société Générale, announced the launch of a new US residential mortgage backed securities (RMBS) group in May last year.