Let's just say that we called it. This time last year, we suggested that banks might be a little late in their zeal for hiring high yield traders. One year on, high yield traders are all over the street.
Take Canaccord Genuity Group. Two years ago, the Canadian bank was building a high yield team. Last week, Bloomberg reports that most of those new high yield hires were let go. It's not hard to see why: in the US, high yield bond issuance is at its lowest year-to-date point since 2012. The European high yield bond market has proven more resilient, but this hasn't prevented banks like Nomura from making wholesale redundancies in the area.
The good news is that some of those London-based Nomura traders who were let go in August and September have already been rehired. Chris Derry, the former head of high yield trading at Nomura joined RBC as head of high yield capital markets earlier this month. Karan Anand, a former executive director in high yield trading at Nomura, has joined ING as head of high yield credit trading. Sarah Mobbs, a former high yield credit sales associate at the Japanese bank, has joined UBS in 'leveraged sales'.
Speaking off the record, recruiters say Nomura retained some members of its high yield team by converting them into distressed debt traders.
Financial News reports that US-based investment bank Oppenheimer began building a London-based high yield team this month. It's already made one hire: Samir Patel from Guggenheim Securities as a European high yield credit analyst. Patel will report to Lance Heatley, head of European fixed income, and Peter Albano, global head of fixed income sales.
With the US high yield market turbulent, the outlook for Wall Street high yield traders who lose their jobs is less certain. The best bet for redundant North American high yield traders might be to relocate to Europe. After all, banks like Goldman Sachs have been predicting big growth in European corporate bond issuance for years.
Photo credit: Karen