UBS has combined its fixed income and credit businesses and is revamping structured products and commodities offerings to bring in more deal flow. Sal Naro and Chris Ryan in New York are assuming joint responsibility for the global fixed income business, which will be renamed credit fixed income. In addition, Stephen Bell will head the flow credit trading business and report to Naro and Ryan, according to the memo penned by Michael Hutchins, head of fixed income, rates and commodities in New York. Kris Kagel, spokesman, confirmed the move, Naro, Ryan and Hutchins did not return calls.
Firm officials said the reshuffle is to encourage bankers to bring in the most lucrative business for the firm, rather than for their own P&L. Hutchins has reportedly made it clear that bankers will be better rewarded for bringing in, for example, USD20 million for the rates and credit business as a whole, rather than say USD15 million just for their own desk. One official cautions while this may make sense for the bank as a whole, it could also bring in a certain subjectivity in to bonus allocation, with the most political employees reaping the largest rewards.
In addition to the merger move, the effort to boost cooperation between desks will be fostered by three cross-product groups. Ramesh Singh, previously co-head of rates and currencies, will head the structured fixed income group, which will consist of the structured components of the credit fixed income and rates groups. Mark Ritter will run a commodities group, which will include energy and precious metals and an emerging markets groups is in the works.
Simeon Schwartz, the other co-head of rates and currencies with Singh, has assumed responsibility for the group and David Shulman has taken over the cash and collateral trading sales effort.
UBS watchers said Naro and Ryan have excellent pedigrees and are likely to bring complementary skills. Ryan's is from Lehman Brothers where he was a successful leveraged loan trader. His conservative attitude to risk is thought to be one of the reasons he has risen to the top in at the cautious post-Long-Term Capital Management bank. Naro is renowned in the credit markets for being one of the most talented and hard-changing credit traders in the U.S. He has reached his position through winning a series of co-head battles, first with Hugh Evans (DW, 3/4/03) and then more recently with Mike Connor (DW, 1/27/04).
As part of this move, UBS has expanded its fixed income, rates and commodities executive committee to include Brian Harris, Suneel Kamlani, Naro, Ryan, Simeon Schwartz, David Shulman and Singh. The current members are Andy Amschwand, Ken Karl and Hutchins.
