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July 31, 2020  

Key Slashes Bond-Distribution Workforce

KeyBank dismissed as many as 15 members of its fixed-income sales and trading team in New York on July 28.

The cuts hit the bank’s structured-product staff especially hard, with head asset-backed bond trader Antonio Blasetti and head non-agency mortgage-bond trader Michael Merwin among those shown the door. Also gone are senior salesmen Daniel Abraham, Patrick Carvell, Kenneth Clisham, William Connolly and Christopher Heaney.

Most of the personnel had arrived in recent years as Key sought to extend its reach in the asset- and mortgage-backed bond markets. While the bank seemingly plans to continue underwriting, distributing and trading those products, indications are that it will lean more heavily on remaining junior staff in the wake of the layoffs.

Because many of those individuals currently support Key’s existing commercial-mortgage and agency residential mortgage finance activities, in turn, there is talk that the bank plans to place more emphasis on those areas.

Indeed, both business lines were unaffected by the reductions. To that end, outsiders suggest that the cuts were intended to reduce risk in response to balance-sheet pressures stemming from the coronavirus pandemic — a process intended in part to ensure that the bank has sufficient reserve capital to backstop its commercial-mortgage servicing business throughout the crisis.

Internally, Key is characterizing the cuts as a reshuffling to take advantage of market choppiness resulting from the pandemic.

But at the height of those disruptions in March, the bank instructed its asset- and mortgage-backed bond traders to stop using internal capital for their dealings. That meant they could only arrange sales between clients and were prevented from exploiting falling bond prices by building positions, as many of its peers were doing.

Meanwhile, Key’s existing trading inventory lost value.

Blasetti joined Key as a director shortly after former employer Brean Capital merged with Hunt Financial Securities in 2018. He had been working at Brean since 2012, and before that was at Gleacher & Co.

Merwin arrived in 2017. His former employers include Merrill Lynch and RBC.

Abraham, a director, came on board in 2017 from Cantor Fitzgerald. He also has worked at Guggenheim, Washington Mutual and Wells Fargo.

Carvell, also a director, joined Key from Hunt in 2018. His resume includes an earlier stint at Key, plus stops at HBK Investments and J.P. Morgan.

Clisham, a managing director, started in 2019. He previously was among a number of personnel who exited Hunt amid the firm’s marriage with Brean. His financial career, dating back to 1983, also has included stops at Cantor, Piper Jaffray, V Cross Capital, J.P. Morgan, Greenwich Capital and Merrill.

Connolly, a director, had been at Key since 2013. Before that, he logged time at BNP Paribas and BGC Partners. His resume additionally includes stops at UBS and predecessors PaineWebber and Kidder Peabody, where he started in 1986.

Heaney, also a director, joined Key in 2016 following stints at Amherst Pierpont, Jefferies and Bear Stearns, where he started in 1988.