10/31/2008

Staffing Churn Continues Across CDO Sector

Barclays and RBS Greenwich have shifted the leadership of their CDO-underwriting teams, while UBS cuts back its staff.

At Credit Suisse, meanwhile, U.S. CDO-banking head Steve Hilfer was gone as of today. The changes at all four banks add to what has been the most tumultuous year ever for CDO professionals, as the sector gets kicked around amid the worldwide credit crunch (see listing on Page 6.)

Barclays appointed Jason Schechter as head of its CDO group this week, handing the former Lehman Brothers staffer a role most recently played by Kristofer Kraus.

RBS assigned Adam Siegel as its top CDO banker in Greenwich, Conn., and Darron Weinstein as his London counterpart, giving them responsibilities last held by Vincent Dahinden. It also installed Matt Katke as co-head of CDO trading in Greenwich.

Under Schechter, Barclays' CDO unit is concentrating on secondary-market trading - a focus brought on by a drought of new-issue activity. He arrived at the bank via its agreement last month to buy parts of the bankrupt Lehman, where he headed CDO trading. Kraus was leaving around the same time. Schechter now reports to former Lehman colleague Eric Felder, who last week took over as Barclays' head of credit-product trading. Lehman had named Felder as co-head of its fixed-income division and awarded him a $41 million retention package in September, just days before filing for bankruptcy protection.

Barclays' appointments come with the bank nearing the end of a staffing shuffle triggered by its purchase of Lehman. Several Lehman staffers have since taken key positions in Barclays' structured-finance division, including Ross Shapiro, Dianne Rinnavatore and Charles Spero. At the same time, Barclays has been carrying out 3,000 layoffs announced as part of the takeover.

At RBS, Siegel, Weinstein and Katke may have moved up from within. Siegel switched to RBS at some point after the collapse of former employer Bear Stearns in March. The same goes for Katke, whose co-head on the CDO-trading desk is Alex Mallinson in London. Dahinden left RBS this summer.

UBS appears to be moving on long-rumored plans to shutter part or all of its CDO-underwriting franchise. Talk was circulating Wednesday that the Swiss bank had just eliminated a handful of remaining trading and sales executives from already-diminished CDO desks it maintains in Stamford, Conn., and London. Group heads Keith Grimaldi in New York and Simon Perry in London were kept on board, however, apparently to oversee secondary-market CDO trading and wrap up work with some existing clients.

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