Credit Suisse Stocks Chief Jain Said to Join Hedge Unit
Credit Suisse Group AG (CSGN)’s Bob Jain will step down after almost four years as head of the stocks business to oversee in-house hedge funds in the money-management division, two people with knowledge of the decision said.
Jain will run the alternatives unit and be based in New York, reporting to asset-management chief Robert Shafir, 54, said one of the people, who requested anonymity because the changes aren’t public. Timothy O’Hara, a former head of the Americas fixed-income department, will assume Jain’s role. An announcement may come this week, the people said.
Revenue from Credit Suisse’s equities business, which includes stock trading, may decline for a third straight year as the European sovereign-debt crisis and stagnating economic growth help depress transaction volumes. The Zurich-based bank, Switzerland’s second-largest, is seeking growth from the alternatives unit after announcing a plan in July to bolster hedge funds and other vehicles that invest client money in liquid assets such as stocks, bonds and commodities.
O’Hara will keep the title of co-head of global securities as he takes over responsibility for the equities business, one of the people said. He was named co-head of global securities in July 2011 alongside Jain and Gael de Boissard, who’s based in London and oversees the fixed-income business.
Credit Suisse’s equities business ranked third by revenue among the world’s biggest investment banks in the first half of this year, data compiled by Bloomberg show. In the nine months through September, the business generated 3.59 billion francs ($3.8 billion) in revenue, down 4.5 percent from a year earlier as volumes dropped industrywide, the bank said last week.
Jain, who is 42 this month, had run the equities business since 2008, one of the people said. He previously was head of proprietary trading, where banks bet on markets with their own money. U.S. firms will be barred from proprietary trading under the so-called Volcker rule, part of the 2010 Dodd-Frank Act.
The alternatives unit at Credit Suisse generated 872 million francs of revenue in the first nine months, down 6.5 percent from the same period of 2011. The unit oversees about 205.1 billion francs as of Sept. 30. That amount includes 28.5 billion francs in private-equity funds.
The bank said in July it that it planned to sell its private-equity funds as part of the shift toward liquid investments.
Credit Suisse told investors then that it was exiting private equity in part because of uncertainty around the Volcker rule, which limits banks’ own investments in hedge funds and private-equity funds to prevent them from taking too much risk.
Last week, the bank announced it also would try to sell its exchange-traded funds, which are part of the alternatives unit. The company had 16.1 billion francs of assets under management in ETFs at the end of the third quarter. The alternatives unit also invests client money in real estate, commodities, credit and index-linked strategies.