When Morgan Stanley decided to cut its fixed income team by 25% back in November 2015, senior sales and trading staff were shown the door first.
Isabel Mahony, its head of financial credit trading in London, left the bank in in January 2016, but has now just re-emerged in a new job nearly 18 months later. She’s head of fixed income sales and trading at Japanese investment bank SMBC Nikko Capital Markets.
In London, where Mahony is based, SMBC Nikko is a relatively small player. It has just 116 people registered with the Financial Conduct Authority register, whereas Morgan Stanley has around 5,000 people in its Canary Wharf headquarters. SMBC Nikko is a subsidiary of Japanese bank Sumitomo Mitsui Bank.
Mahony spent nearly seven years at Morgan Stanley, latterly as a managing director and co-head of investment grade trading. She joined from Royal Bank of Scotland in May 2009.
Senior employees ousted from Morgan Stanley towards the end of 2015 have been landing in various spots since the cuts were announced. Thomas Moore, its head of European analytics, joined Invesco Perpetual as a senior analyst in June last year, while Oliver Jerome, head of FX and emerging markets EMEA, and Pete Eggleston, the bank’s head of quant solutions and innovations (QSI), decided to start their own regtech company BestX.
Since cutting 25% of its fixed income business in late 2015, Morgan Stanley – like the vast majority of investment banks – has seen vast improvements in its fixed income revenues. However, it’s planning on increasing headcount any time soon.
Colm Kelleher, speaking at Morgan Stanley's European Financial Conference in March, said: “Clearly we were all running outsized fixed income businesses — far too much capital, far too much leverage, far too much liquidity trapped in, very sloppy way of dealing with derivatives — all that stuff.”
SMBC Nikko isn't the only Japanese bank hiring. Nomura just brought in Tristan Laurencin, who was head of leveraged loan trading at Societe Generale until September when he was replaced by Benoit Blanchard. He's now head loan trading, covering distressed situations, at Nomura. He spent just over three years at SocGen.
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