Citigroup Said to Disband Raytcheva’s Proprietary-Trading Team

  • Raytcheva may remain at firm in role not yet determined
  • Bank said to close the desk for a lack of opportunities

Citigroup Inc. disbanded a team of traders who used the bank’s own money to make bets in U.S. Treasury and agency bond markets, according to a person briefed on the move.

The team, run by Anna Raytcheva and known internally as the strategic-trading desk, was shuttered as market opportunities began drying up, the person said, asking not to be identified talking about internal deliberations. The bank decided that resources would be better deployed in businesses that serve clients, the person said. At the same time, issuance of one type of security the desk traded, collateralized mortgage obligations, has dropped this year.

The handful of employees affected have moved to other roles at New York-based Citigroup, and Raytcheva is expected to stay at the bank as well, the person said. Reached by telephone, she declined to comment on the company’s decision.

Raytcheva had a rare mandate after much of Wall Street shut down proprietary-trading teams in the wake of new rules limiting the once-lucrative business. Treasuries, U.S. agency securities and derivatives are exempt from those limits. Mortgage traders have found it more difficult to make money in recent years, partly because the Federal Reserve’s quantitative-easing program, which involved buying and holding such debt to help stimulate economic growth, has contributed to a plunge in daily trading volume.

Raytcheva, a Princeton University-educated trader who immigrated to the U.S. from Bulgaria, was put in charge of the team in 2014 after running the firm’s agency-mortgage trading desk. At the time, the group managed about $1 billion of investments, and didn’t have clients.

Bad Bets

Prior to those two roles, she lost billions of dollars for the New York-based lender during the financial crisis when her mortgage bets soured, people familiar with her performance said in 2014. Scott Helfman, a Citigroup spokesman, declined to comment.

The closing of the operation is one of the latest actions taken by Mark Tsesarsky since he took sole leadership of the securitized-markets business earlier this year. His former co-head, Jeffrey Perlowitz, announced his retirement in March, ending a two-decade partnership between the two men in which they shared oversight of various mortgage- and securitized-debt trading businesses at Citigroup and its predecessors.

Other changes in the group include the departure of Jay Huang, global head of collateralized-debt-obligations trading, who left the bank around the time Perlowitz’s retirement was announced, people with knowledge of the matter said in March.

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