LONDON, Sept 30 (IFR) - BNP Paribas has reorganised its equity derivatives business to more closely align its operations around client types and made a series of hires as other banks step back.
The new institutional sales division is headed by Emmanuel Dray, who is promoted from his role as global head of flow equity derivatives.
In his new role, Dray will focus on the full range of institutional clients, including hedge funds, pension funds, insurers, asset managers and sovereign wealth funds. He also retains his responsibilities for linear trading across delta one products, futures and forwards, encompassing ETF market-making, risk premia and thematic baskets.
“We wanted to realign our focus more on the client and less on the product,” Dray told IFR. “We want to be agnostic to the kind of product that we sell to our clients - a pension fund may want to invest in a systematic strategy, or it may opt for a flow product such as a variance swap or a dividend swap.”
The new structure reflects the growing need for institutional investors to consider a broader range of products to meet their investment needs against a backdrop of low and negative interest rates and weak equity conviction.
“Despite the massive firepower of central banks, there’s little consensus over where equity markets can go and should go,” said Dray.
With US equity benchmarks including the S&P 500 and Nasdaq trading around their all-time highs, investors have become increasingly uncertain over further future direction, particularly when that bullish performance has come alongside six consecutive quarters of contracting earnings. According to Dray, many institutions are not yet prepared to make the leap to single stocks, having seen blue-chip names such as Volkswagen and Deutsche Bank come under heavy pressure on negative news flow.
“We’re missing the directional, macro flows that drove markets in recent years, but investors are still scared of single names given the rise in idiosyncratic risk. There’s a lot more interest in sector-wide and thematic investing,” said Dray.
As part of the reorganisation, the French dealer has made a series of new hires as it continues to expand the business while many of its competitors scale back.
Diego Caielli joined earlier this month in a senior sales role covering North American pension funds and hedge funds. He joined from Credit Suisse and previously held roles at Goldman Sachs and JP Morgan covering volatility and macro accounts.
The bank has also hired Navir Brar as head of UK institutional sales, covering pension funds, insurers and asset managers. He joins from JP Morgan and will be involved in developing the French dealer’s flow and delta one activities.
The bank has added two European index exotics traders, Rim Zidani and Reda Benali. Zidani joins from Deutsche Bank and Benali was previously at Citibank. (Reporting by Helen Bartholomew)