eFC Briefing: Layoffs, Departures, and New Hires
RBS is poised to shed bankers as it integrates ABN Amro. Credit Suisse and Calmos Asset Management announced headcount reductions. Goldman Sachs' mortgage trading chief, a key player in the bank's profitable bet against sub-prime, is resigning, possibly to start his own hedge fund. Jefferies announced several hires in mortgage-backed securities (gasp!) and commodities.
Some 7,000 investment bank jobs are expected to bite the dust at ABN Amro and its new owner Royal Bank of Scotland as implementation of their six-month-old merger moves into high gear. Formal "consultations" targeting those to be laid off will continue for the next month or two, the Financial Times reported. the newspaper says the absorption of ABN Amro's investment bank into RBS's global markets division is "likely" to eliminate about about 25 per cent of the combined 28,000 workforce.
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Credit Suisse is eliminating 500 more investment bankers and staff, three months after announcing a layoff of similar proportions. The company cited "market conditions and projected staffing levels required to meet client needs." But, even while laying off bankers and staff, the bank continues to hire in growth segments such as algorithmic trading, emerging markets, commodities, derivatives, life finance and prime services, according to Financial News.
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Goldman Sachs mortgage chief Dan Sparks unexpectedly resigned after playing a key role in the bank's record profits last year. He told superiors he planned to leave "for personal reasons," according to The Wall Street Journal. His successors are reported to be Justin Gmelich, current head of U.S. credit trading at Goldman, and Thomas Cornacchia, head of credit sales. Last year Sparks supported his traders' hugely successful strategy of shorting the sub-prime market.
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Jefferies & Co. will add 10 mortgage-backed securities specialists over the next several weeks, including two who will become co-heads of mortgage trading. They are Johan Eveland, who co-led MBS trading at RBS Greenwich Capital, and William H. Jennings, II, Greenwich Capital's top mortgage salesperson in 2007, who is expected to join Jefferies in June.
Jefferies also hired two senior commodities professionals - one for its buy-side unit and one for its sales and trading business. James P. Crimmins, who came from Goldman Sachs, joined Jefferies Asset Management as a managing director in the commodity programs division. Thomas H. Dering became a senior vice president within Jefferies Financial Products. He was most recently a senior vice president at Morgan Stanley.
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Lehman Brothers created a position of global head of sovereign wealth funds and named one of its senior investment bankers to the role, based in Dubai. The appointment of Makram Azar makes Lehman the latest investment bank to launch a dedicated team covering sovereign wealth funds.
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In the space of a week, California's state pension fund lost both its chief executive and its investment chief. The $245 billion California Public Employees' Retirement System (Calpers) confirmed that Fred Buenrostro will retire as CEO to pursue unspecified "lucrative opportunities in the private sector." A week ago, the fund said Russell Read would depart as chief investment officer on June 30 to pursue a long-standing interest in environmental and clean technology investing.
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Calamos Asset Management said it reduced its workforce by 28 positions or 7 percent, in the first quarter quarter, in line with declining revenues. It also said Chief Executive John Calamos Sr. and Co-Chief Investment Officer Nick Calamos temporarily reduced their 2008 base salaries by a total of almost $1 million.
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Merrill Lynch hired former Goldman Sachs executive Thomas K. Montag as head of global sales and trading. His appointment was in the works for months, as Merrill Chief Executive John Thain had confirmed he'd been wooing his former colleague soon after Montag retired as head of Goldman's global securities business last December.
