Chris Lee is set to join Deutsche Bank as head of global markets investment products and db-x to replace Nitin Nath. Lee was previously head of equity risk management products at UBS, a position he quit in March.
It was not known at the time of his departure where Lee was going, but the announcement yesterday that he is joining Deutsche Bank will not come as a big surprise to the market. At UBS, Lee led a business that was one of the market leaders in equity derivatives, and especially in listed products.
In particular, UBS has had a strong track record in sales to private banks and retail investors, which is the same client base that Lee will be responsible for in the global markets investment products business at Deutsche.
It is an area the bank has been focusing on recently. "We have always had a strong fixed-income business, but equities was not previously as strong," says Bhupinder Singh, head of Deutsche's institutional coverage group and structuring for Asia. "That's no longer the case. We've made significant investment in equity derivatives during the past 12 months."
Lee is not the team's first senior hire. Deutsche poached Kenneth Hon from Citi in April to head the team's trading desk, where he has been developing the bank's risk management capabilities in preparation for Lee to come on board and start a sales push. "We wanted to develop the trading side before the coverage side," says Singh. "Now that's in place, we're ready for Chris to come in."
Despite Lee's strong background in equities, the global markets investment products team at Deutsche is a multi-asset team that also sells fixed-income products. However, Singh says Lee's initial focus will be to continue the development of the equities business.
Neha Bakshi will move from fixed-income structuring to head the South Asia business, where equity products are less popular, and to act as Lee's deputy on the fixed-income side. She is based in Singapore.
In a separate role, Lee will also be responsible for Deutsche's db-x structuring platform, a different business group that structures listed products such as funds, warrants and exchange-traded funds, reporting directly to Singh. In his other role, Lee will report to Anjul Oberai and Shen Yan, co-heads of the institutional client group for Asia ex-Japan.
Lee also brings his experience of UBS's pioneering online equity derivatives platform, EQI, which was developed by the Swiss bank in Hong Kong in 2003 and allows investors to price and execute a range of simple options products in real time.
Such platforms are now appearing at other banks in Hong Kong. Credit Suisse hired Lee's predecessor, Min Park, last year and now has a similar product that it is rolling out to private banks. Barclays Capital and Citi have also both rolled out Hong Kong-developed systems, and Deutsche is working on its own version.
The financial crisis has made it much more attractive for banks to offer click-and-trade services for structured products. Investors these days are much less interested in buying the kinds of esoteric options that earned big fees for banks during the bull market. Instead, they want simple, transparent products that can be traded easily -- exactly the kinds of products that are suited to online pricing and trading.