Jared Epstein, the former head of flow credit trading at BNP Paribas SA, has been hired by Jefferies Group Inc. to trade fixed-income exchange-traded funds, according to people familiar with the decision.
Jefferies has decided to expand into exchange-traded funds tied to debt, with Epstein being brought in to help build the business, said one of the people, who asked not to be named because the decision hasn’t been made public. The New York-based firm offers its clients market-making services in equity exchange-traded funds, according to its website.
The funds are gaining in popularity with individuals as the Federal Reserve says it will keep benchmark interest rates near zero until at least late 2014, As of Feb. 23, exchange-traded funds for speculative-grade bonds were drawing the biggest inflows on record from investors seeking access to higher-yielding assets. Investors have bought $6 billion of investments this year in the securities that track junk-bond indexes, about a third of all the money moving into high-yield funds this year, according to a March 23 JPMorgan Chase & Co. report.
Richard Khaleel, a Jefferies spokesman, declined to comment. Epstein didn’t respond to voicemails and text messages sent to his mobile phone.
Epstein, who was appointed as head of flow credit trading at BNP Paribas in June 2009, previously worked for eight years at Morgan Stanley, where he was a managing director in market-making and proprietary trading, according to his BNP Paribas biography. Earlier, he worked for Lehman Brothers Holdings Inc. in structured credit trading. Megan Stinson, a spokeswoman for BNP Paribas in New York, yesterday confirmed Epstein’s departure.
Flow credit trading is the business that serves as a middle-man on the most liquid types of credit, compared with proprietary trading or structured transactions.