2016

Fixed-income businesses across Wall Street have faced unparalleled challenges but revenues that were previously down have been the savior of investment banks who have been challenged by weak revenue growth in other areas.

Big investors on the "buy side," now have much more power than they once did, with assets under management exploding over the past decade. The asset base of buy-side entities is expected to reach about $100 trillion by 2020.

There have also been changes in management in �xed-income divisions, with traders from other parts of the securities business brought in to head-up units. In many cases, these new managers are shaking up the old way of doing things.

The way bond trading is conducted is changing. There is less liquidity. Given the shift toward agency trading, the shrinkage of dealer balance sheets and the growth of buy-side balance sheets, investment banks are having to give away more information to clients.

has been a challenging but rewarding year for many in the rates businesses. Extended periods of low volatility have been punctured by massive moves, �rst with the Brexit vote in June, and then in the immediate aftermath of Donald Trump's win in the US presidential election. Global bonds lost $1.7 trillion; sending US interest rates to their highest in a year. According to Bloomberg, bond markets have only experienced such sharp one-week drops only twice in the past twenty years and November was the worst month in the history of the Bloomberg Barclays Global Aggregate Total Return Index. However unpleasant bond fund managers may �nd the current situation, the rates businesses — whether in the US, EMEA, or Asia — have been thriving on the volatility. Corporate issuance, which was robust and sustained until the aftermath of the American election, has fueled activity on rates desks and driven revenues up. Another factor that strengthened rates especially in the second half of the year was the return of M&A activity.

While right-sizing is still ongoing, there continues to be demand to hire talent in junior ranks. Banks are willing to hire senior professionals but only if they �ll a very speci�c need. Traders have found the markets more welcoming than salespeople and structurers, who continue to bear the brunt of layo�s and the impact of downward compensation trends.

YEAR END ROUNDUP: RATES

American and European banks have kept compensation budgets under control, replacing senior underperformers with junior talent. There is still demand for long-end treasury traders, and the movement of talent between the buy- and the sell-side has been a two-way street. Banks have added trading talent when necessary as well as salespeople for very speci�c coverage roles, such as real money accounts. Headcount has been �at to slightly lower at the top-tier �rms. In general, sales desks are still consolidating. A number of European banks have been hiring to rebuild their rates and macro businesses.

The struggles faced this year by macro funds have meant that rates traders have been more amenable to accept sell-side o�ers. However, sales professionals, especially those covering �ow sales to hedge funds, have not been in demand. In Asia, domestic banks and brokerages continue to be more active than international banks in talent acquisition. Candidates with �uency in the local languages and strong relationships in Hong Kong, Singapore, Taiwan, and Korea remain in demand.

0% 2% 4% 6% 8% 10% 12% 14% 16%

Raises for Rates Traders

Source: Options Group estimatesSource: Options Group estimates

OptionsRepos

Front End SwapsLong/Med Swaps

InflationMunis

Pass-ThrusSTIR

Treasuries - Front EndTreasuries - Belly

Treasuries - Long EndAgencies

Trading Average

12%

8%8%

9%

5%5%5%

0%

7%10%

15%

3%

3%

2%

5%5%

0%

InstitutionsCorporates

Sales Average

Rates Strategy

TRADING

SALES

STRATEGY

OptionsGroup.com New York +1.212.982.0900 London +44.(0)207.448.0100 Hong Kong +852.2155.1300

Select People Moves: January 1 - October 21, 2016

NAME TITLE NEW FIRM PREVIOUS FIRMAsano, Masayoshi PM, Rates AlphaDyne Asset Management Singapore Morgan Stanley TokyoBedi, Jaideep ED, USD Rates- Asia JP Morgan Chase Singapore Morgan Stanley New YorkBegg, Adam Rates Sales - Hedge Funds UBS London Credit Suisse LondonButler, Joseph Head of USD Swaps Trading HSBC New York Black River Asset Management New YorkCalluzzo, Jon L. PM, Rates/Macro Goldman Sachs Asset Management New York Citigroup New YorkCameron, Hamish Head of Corporate Rates - Americas HSBC New York Bank of America Merri l l Lynch New YorkCheng, Richard T. Director, Rates Sales Standard Chartered Bank Hong Kong ANZ Hong KongCignarella, Greg MD, Head of North American Sales BGC Partners New York Citigroup New YorkCurran, Hilary Head of USD STIR Trading Deutsche New York Morgan Stanley New YorkD'Annibale, Stefan C. MD, Head of Linear Rates HSBC New York MKP Capital New YorkDeniston, Mark MD, Rates Trading Royal Bank of Scotland London Brevan Howard LondonDickstein, Josh MD, Head of Municipal Bond Trading Jefferies New York Goldman Sachs New YorkEgan, Tim Senior Director, International Rates Sales JP Morgan Chase Sydney Goldman Sachs SydneyFarah, Wissam MD, European Sales Nomura London Citigroup LondonFassam, Sebastian Robert GBP Swaps Trading Goldman Sachs London Barclays LondonFriedman, Brian C. MD, Rates-Swaps Trading Goldman Sachs New York Brevan Howard New YorkGarat, Juan Global Head Sales BBVA Madrid Citigroup LondonGhosh, David MD, Rates Trading Brevan Howard London UBS LondonGill, Manjeet Director, Euro Government Bond Trading UBS London Deutsche LondonGronager, Ardal Government Bond Trading Credit Suisse London Morgan Stanley LondonGulati, Vivek Senior Rates Trader BNP Paribas Tokyo Barclays SingaporeHancock, Samuel PM, Rates Caxton Associates New York Bank of America Merri l l Lynch New YorkHartnett, Thomas SMD, Head of Fixed Income Sales and Trading Mizuho Securities New York Deutsche New YorkJha, Richa Director, Sales Structured Solutions Leonteq Securities Singapore UBS SingaporeJogia, Hiren Head of Inflation Trading RBC Capital Markets London Credit Suisse LondonKulkarni, Jeffrey Kishor Rates Sales - Hedge Funds UBS London Credit Suisse LondonLefebvre, Arnaud Macro Trading Point72 Asset Management London Credit Suisse LondonLeyland, William Rates Swap Trading North Asset Management London Morgan Stanley LondonLin, Yuri MD, Head of Fixed Income Distribution Jefferies Tokyo Natixis Hong KongMancini, Anthony Head Of Institutional Municipal Bond Trading Oppenheimer & Co New York TD Securities New YorkMartini, Michael Interest Rates Trading RBC Capital Markets New York Citigroup New YorkMcKendry, Mark Director, Rates Trading - AUD RBC Capital Markets Sydney Westpac SydneyMisra, Priya MD, Head of US Rates Strategies TD Securities New York Bank of America Merri l l Lynch New YorkMohney, Danielle Volatility Trading Pimco Newport Beach Credit Suisse New YorkMoore, David MD, Head of US Rates BNP Paribas New York Brevan Howard New YorkMundorf, Philipp PM, Government Bond Trading Goldman Sachs Asset Management London Morgan Stanley LondonMundy, Jeff A. Director, US Treasuries Trading Citigroup New York Deutsche New YorkNeuhaus, Pedro Director, FI Derivatives Trading Credit Suisse London Nomura LondonNihei, Hirokazu Director, Rates Sales - Japan Wells Fargo New York Deutsche New YorkOuaghram, Mohamed S. B. Macro Trading Point72 Asset Management London Credit Suisse LondonOweida, Samer O. MD, Macro Sales Morgan Stanley New York Credit Suisse New YorkPande, Vinay MD, Global Head of Trading Strategies UBS New York Brevan Howard New YorkPavan, Subhathra MD, Rates Sales Mizuho Securities New York Deutsche New YorkPro, Carlos Macro Discretionary Group - Global AQR Capital Management Greenwich Credit Suisse New YorkPurohit, Neel PM, Rates PointState Capital New York Barclays New YorkRathbun, Jonah Director, UST Trading - Long End Citigroup New York RBC Capital Markets New YorkRatliffe, David MD, Head of Financial Institutions Coverage - APAC BNP Paribas Hong Kong Citigroup Hong KongRattini, Benedetta Institutional Rates Sales BNP Paribas London UniCredit Bank LondonRussell, Peter Rates Trading, Macro Group Point72 Asset Management New York Bank of America Merri l l Lynch New YorkShukla, Vivek Strategist, Rates Vanguard New York Barclays New YorkSmaus, Adrian Senior Rates Options Trader Eisler Capital London Credit Suisse LondonTakahara, Hiryuki Head of Rates Sales ANZ Tokyo Royal Bank of Scotland TokyoTakemura, Yoichi Director, Rates Trading-Swaps JP Morgan Chase Tokyo Citigroup TokyoWang, Alec Greater China Offshore Sales Credit Suisse Hong Kong Deutsche ShanghaiYang, Kewei David MD, Macro Rates & FX Strategist Graticule Asset Management Singapore Morgan Stanley Hong KongYarian, Michael MD, Head of Fixed Income Trading - Americas HSBC New York Barclays New YorkYearick, William IR Derivatives Trading Wells Fargo New York BlueCrest Capital Management New York

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