Morgan Stanley Bond Traders Said to Defect as Fixed-Income Slows

Morgan Stanley Bond Traders Said to Defect as Fixed-Income Slows

(Bloomberg) -- Morgan Stanley lost three emerging-market bond traders to competitors, according to people with knowledge of the matter.

Sovereign-bond trader Elias Abud and corporate-bond traders Georges Fernandes and Johann Komander departed in recent weeks, said the people, who asked not to be identified discussing personnel. Abud left for Nomura Holdings Inc., Fernandes for BNP Paribas SA, and Komander for Goldman Sachs Group Inc., according to the people. Representatives for the banks declined to comment, as did the traders.

Traders across Wall Street sometimes leave in the weeks after getting their bonuses in the hopes of finding better pay elsewhere. Compensation at Morgan Stanley declined 10 percent last year to $16 billion. Wall Street’s average bonus fell 9 percent to $146,200 in 2015, the biggest drop since 2011, according to estimates by New York State Comptroller Thomas DiNapoli.

Morgan Stanley Chief Executive Officer James Gorman has focused on the capital-intensive fixed-income business, which has weighed on return on equity. To help it achieve a 9 percent to 11 percent ROE target by 2017, Morgan Stanley has said it will be disciplined on compensation costs, and cut about a quarter of its fixed-income staff at the end of last year.

Gorman  shook up the fixed-income leadership in October, making equities chief  Ted Pick head of all trading. Pick later assigned a key deputy, Sam Kellie-Smith, head of fixed-income trading. Kellie-Smith is the sixth manager to take on that challenge in the past seven years.

Morgan Stanley’s fixed-income trading revenue fell 8.2 percent to $550 million in the fourth quarter, excluding one-time items, a steeper drop than many analysts had estimated and the second-lowest since the financial crisis.

--With assistance from Jenny Surane. To contact the reporters on this story: Katia Porzecanski in New York at [email protected] ;Hugh Son in New York at [email protected] To contact the editors responsible for this story: Peter Eichenbaum at [email protected] Steve Dickson, Steven Crabill

TAGS: Fixed Income
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