Credit Suisse Hires UBS’s Stewart to Shake Up Equities UnitBy and
Stewart to start in New York in June, replacing Mike Paliotta
Credit Suisse shifting investment bank focus to equities
Credit Suisse Group AG hired UBS Group AG’s Mike Stewart as head of equities, poaching a seasoned investment banker and wealth manager as it seeks to boost a business that has lagged behind peers this year.
Stewart, who had a similar role at UBS until 2015, will join Credit Suisse in New York in June, replacing Mike Paliotta. He will report to Brian Chin, who became head of global markets, the bank’s trading unit, in September, the Zurich-based lender said.
“Equities is not only a critical part of the Global Markets strategy, but a critical part of the overall Credit Suisse strategy,” Chin said in a memo announcing Stewart’s appointment. “Especially with his most recent role in wealth management, he will be a driving force in executing our strategy to facilitate collaboration opportunities” between units.
Credit Suisse has been shrinking its investment bank in favor of wealth management under Chief Executive Officer Tidjane Thiam, and shifting the focus in trading away from fixed income toward equities. A 21 percent slump in stock trading revenue in the first nine months of this year set back those plans.
The performance was a low point for an equities-trading business that was second in revenue among global rivals coming out of the financial crisis. Credit Suisse ranked sixth in the first nine months of 2016, according to Bloomberg Intelligence.
“Thiam has little choice but to make some changes,” said Oliver Rolfe, managing director at Spartan Partnership, a London-based recruiter that focuses on the stock-trading business. “Making important strategic hires will buy Thiam and Credit Suisse time to get it right or, more importantly, time to breathe and assess how the market will look next year.”
Credit Suisse executives have blamed much of the decline in the third quarter on a unit called the Systematic Market-Making Group, or SMG, that uses computer models to make stock wagers. This group is moving to the bank’s asset management arm and will raise funds from external investors.
Stewart was one of several former investment bankers at UBS who took on roles in wealth management after that business became the cornerstone of UBS’s strategy. He joined the wealth management division in January 2015, after leading the equities division at its investment bank.
Paliotta, the current head of equities at Credit Suisse, will stay in the role until Stewart’s arrival.
“I’d like to thank Mike for his unwavering dedication to the business over the years and I look forward to continuing to work with him going forward as an invaluable member of the team,” Chin said in the memo.