Cloherty Joins RBC as Strategists Play Musical Chairs

The game of musical chairs between strategists in the U.S. government bond market is heating up.

Michael Cloherty, the former head of U.S. interest-rate research at Bank of America Corp. who was hired by Societe General in March, is joining Royal Bank of Canada as head of U.S. fixed-income rates strategy, according to people familiar with the situation. Cloherty, who left Societe Generale before his official start date, is taking the position vacated at RBC Capital Markets by Ira Jersey, who left to rejoin Credit Suisse Group AG after working at RBC Capital Markets for 16 months.

“The old days of the loyalty attached to a company, given the basic restructuring of the investment banking market, are over,” said David Jones, 71, who worked at Aubrey G. Lanston & Co., one of the original primary dealers, for 30 years, rising to vice chairman. “Companies let go of so many people that it broke virtually all loyalty ties. There’s been a complete breakdown.”

The number of primary dealers, which underwrite the U.S. government’s debt and trade directly with the Federal Reserve Bank of New York, has increased to 18 firms from a low of 16 last year as issuance rises. Sales of Treasuries are projected to reach $2.43 trillion in 2010, according to a survey of 10 of the primary dealers.

In February, Nomura Holdings Inc. hired George Goncalves as head of U.S. rates strategy after he spent about eight months at Cantor Fitzgerald & Co., where he joined from Morgan Stanley. Nomura, which became a primary dealer in July, also hired Stanley Sun from Bank of America in April, and Aaron Kohli, who left Royal Bank of Scotland Group Plc last month.

Credit Suisse

Cloherty and Jersey worked at Credit Suisse under Dominic Konstam, who left the firm in March to become director for fixed-income research in New York at Deutsche Bank AG. Carl Lantz has taken over for Konstam as head of interest-rate strategy at Credit Suisse.

RBC Capital Markets spokeswoman Kait Conetta and Cloherty couldn’t be reached for comment. Societe Generale spokesman, James Galvin declined to comment.

BNP Paribas SA hired Kevin Walter to head the primary dealer’s Treasury trading desk, according to a person familiar with the situation. Walter, who joins from Deutsche Bank AG, replaces Jeffry Feigenwinter, who is going to Morgan Stanley. Walter couldn’t be reached for comment.

Megan Stinson, a spokeswoman for BNP Paribas, said the firm had no comment. Jennifer Sala, a Morgan Stanley spokeswoman in New York, confirmed that Feigenwinter was joining the primary dealer.

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