Nomura Securities has spent the last six months hiring more than 40 new officials for its fixed-income division, yet it says its work has just begun. Word on the Street last week was that the company was interviewing several members of the Prudential Securities MBS and ABS teams, just days after the public announcement that Pru was exiting the institutional bond business (see p. 1).
"We are talking with a series of individuals and groups including some people with Prudential," said P.J. Johnson, spokesman for Nomura. "If and when we make any decisions we will announce promptly as is our practice."
But in addition to the Pru hires, expect the firm to hire close to 40 more fixed-income professionals in the next few months, many before the New Year, sources say.
The past few weeks have seen Nomura's New York offices more resemble a Hollywood casting call than a securities firm, as inside sources said every available conference room has been turned into an impromptu interview center. This week the firm's co-heads of capital markets based in London and Tokyo will be in New York to assist with the interviewing process. Nomura, set on establishing a competitive fixed-income division, is ready to sign as many as 30 to 40 more officials.
Nomura is looking to hire across the fixed-income spectrum, looking for asset-backed, mortgage-backed and commercial mortgage-backed officials as well as derivatives traders and salesmen. The company also has an ambition to build up a corporate bond desk, either by cherry picking a variety of Street shops or by wholesale poaching of an entire division from a rival bank.
Nomura benefits from great timing for its hunt, as the recent proposed mergers between Credit Suisse First Boston/Donaldson, Lufkin & Jenrette and Chase Manhattan/J.P. Morgan have made many capital markets officials wary about their futures and much more receptive to a change of address. Already, Nomura has made serious incursions into DLJ, nabbing the heart of its repossessed loan desk in early October and recently hiring DLJ's John Kistler to be managing director in MBS and structured product sales. Last week Nomura raided CSFB for Managing Director Joseph McHale and hit UBS Warburg acquiree PaineWebber for ABS structurer Robert Catarella.
"We're looking for a whole capital markets team," said Alex Noujaim, who serves as executive managing director and head of fixed income for Nomura. Nomura recently engaged an executive recruiter to help further improve its employee search, hoping to take advantage of the restless Street labor market.
There's money to spare as well, as Nomura's parent company put about $550 million at the end of 1999 into its U.S. holding company, Nomura Holding America Inc., to strengthen its global capital markets businesses and build a derivatives subsidiary.
"It's a good time to be looking," Noujaim said. Nomura wants to fill all aspects of its structured finance businesses, looking for pros for high-yield collateralized mortgage obligation products, debt sales and trading - with an emphasis on Street veterans with derivatives experience.
Potential, Not Track Record
Nomura is wooing potential hires based on its projections for the future, not its present status in fixed income. After all, a glance at the nine-month league tables for 2000 has Nomura AWOL in most categories, not cracking the top 15 underwriters in such areas as mortgage-backeds, asset-backeds or corporate debt, and appearing only on the margins of such markets as long-term agency eurobonds or international convertibles. Nomura officials hope that importing a boatload of top-grade pros will change that situation in short order.
While some market rivals still consider Nomura to be damaged goods because of its well-publicized woes in the late 1990s that culminated in the collapse of its commercial mortgage spinoff, that perception seems to be altering among the Street rank and file. One veteran mortgage analyst said that simply because Nomura is hiring at a time when most major Street shops are not gives it instant cachet on the Street.
The company is not just looking for veteran talent. Nomura has begun seeking out new blood from business schools, conducting 12 campus visits in recent months, and setting up a training program to groom young officials.
And Nomura's aspirations are not confined merely to fixed income. Nomura is now planning to make an investment in a technology company to develop e-commerce solutions software for many of its global businesses.
The hiring binge began this March, when Nomura lured Goldman and Morgan Stanley veteran Noujaim away from FN Capital, a Rye, N.Y.-based hedge fund he founded, and gave him a mandate to rebuild the shop. Among the first major hires was Josh Edelson, who was poached from DLJ where he was head of high-grade sales. Edelson is now national sales director for Nomura.
The shop also hired David Berning from Compagnie Financiere de CIC as division head of risk, and nabbed Becker Drane, a derivatives pro from Paribas, to run fixed-income option trading.