Nomura Securities, for practical purposes, closed its fixed-income research department when it dismissed its six-member team over the course of several weeks, culminating in the departures of three major securitization researchers last week.
Market sources now say the Japanese investment bank will buy its research, although it is not clear how the bank would source that product. Mark Adelson left Nomura Securities last week, after more than six years with the firm. Adelson was a managing director and spearheaded Nomura's structured finance research efforts. Also departing Nomura recently were fellow researchers James Manzi and Diana Berezina, who had been with the company for seven years and three years, respectively. Both Manzi and Berezina handled an array of asset classes, with particular focus on CMBS and residential MBS.
These layoffs happened just weeks after the exit of David Jacob, Nomura's former head of fixed-income research.
Aside from the departures of those three analysts, market sources say the investment bank let the rest of the fixed-income research department go, except for one unnamed analyst who was offered consulting work.
The decision marked a turnaround from the days when Nomura played a key role in developing the commercial mortgage conduit business. Years later, Nomura's commercial mortgage conduit business suffered a huge decline after the Asian economic crisis and subsequent Russian defaults in 1998 led to a massive selloff in bonds, said market sources. Market sources add that Nomura's decision to shut down its research department last week is confirmation that its commitment to building a thriving fixed-income enterprise in the U.S. had waned over the years.
"Nomura was not classically in the business anymore. They eliminated their traditional sellside platform a while ago," one market source said. "I think it's just a step toward them exiting the structured product capacity [of their business altogether]."
Before Nomura, Adelson had worked at Moody's Investors Service for more than nine years as a managing director in the MBS, ABS, and ABCP areas, according to market sources. Prior to Moody's, Adelson practiced law at Thacher Proffitt & Wood, where he began his securitization career as an MBS lawyer.
Nomura did not comment about the fixed-income team. In the investment bank's first-quarter financial results, however, the company said that net revenue in fixed income jumped 94.8% compared to the prior quarter, thanks to record orders for currency-linked and interest-rate structured bonds. That offset a 31.2 billion ($262 million) loss due to the deterioration of the U.S. RMBS market.
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