Brigade Capital Management LLC, a hedge fund that invests in credit markets, hired distressed-debt analyst Scott Hoffman from Deutsche Bank AG as the biggest banks reduce pay and curb risk-taking in response to new regulations.
Hoffman joined Brigade in New York this month, according to two people familiar with the move who asked not to be named because it hasn’t been announced. Hoffman is no longer registered with Deutsche Bank’s New York office, according to Financial Industry Regulatory Authority records.
Deutsche Bank said last month it would rely more heavily on a reduction in risk-weighted assets to meet a capital goal for the beginning of 2013 after second-quarter profit fell about 42 percent, missing analysts’ estimates. As they respond to rules from U.S. Congress to the Basel Committee on Banking Supervision, primary dealers have cut inventories of corporate securities by 82 percent since a 2007 peak to $42.5 billion as of Aug. 8, Federal Reserve data show.
Hoffman, who didn’t return a call or a message to his Brigade e-mail address seeking comment, left Germany’s biggest bank amid last month’s departures of Antoine Cornut, who headed flow-credit trading in the Americas and Europe, and Tom Higbie, a credit analyst who went to hedge fund Solus Alternative Asset Management LP. Hoffman joined Deutsche Bank in 2009 after working at Citadel Investment Group and Credit Suisse First Boston Corp., Finra records show.
Aaron Daniels, a lawyer at Brigade, and Amanda Williams, a Deutsche Bank spokeswoman, declined to comment.
At least 10 credit traders have left Deutsche Bank’s New York credit dealer since the beginning of 2011 as the lender limited cash bonuses. They were capped last year at 100,000 euros ($123,280) at Deutsche Bank, 65,000 pounds ($102,122) at U.K. lender Barclays Plc, and $125,000 at Morgan Stanley in New York, according to data compiled by Bloomberg. For some at Charlotte, North Carolina-based Bank of America Corp., cash bonuses were limited to $150,000.
Frankfurt-based Deutsche Bank is the third most-active underwriter of corporate bonds worldwide this year, according to data compiled by Bloomberg.