Morgan Stanley hires CB team from Standard Chartered

Morgan Stanley is making a big push into convertible bonds in Asia with the hire of five industry specialists, including a highly regarded sales trader and two origination bankers from Standard Chartered.

According to sources, the US investment bank has poached Janice Dunnett from Standard Chartered to become head of convertible bond products in Asia, which essentially means she will be leading the sales trading efforts with regard to CBs. Dunnett, who is one of the top personalities within CB sales in the region, will start in mid-April and take on the title of managing director within the institutional equities division.

She will be joined on the origination side by Ronnie Potel and Dave Sandor, who are returning to a major US bank after less than one year with Standard Chartered. The pair previously worked together at Citi.

Potel, a managing director, has been instrumental in building Standard Chartered's budding CB business since he joined the UK-based bank as global head of origination for equity-linked securities in May last year. He will take up a similar position at Morgan Stanley where his title will be head of CB origination for Asia-Pacific, while Sandor, a vice-president, will form a key part of the CB team within global capital markets.

Sandor will join in mid-April, and Potel is expected to follow in May after their respective gardening leaves.

In addition to these three, Morgan Stanley has also hired two unnamed CB traders from Goldman Sachs and UBS, who will join in the coming months, the sources said.

Contrary to its top positions in the CB markets in Europe and the US, Morgan Stanley's CB business in Asia has never quite been on par with its outstanding equities franchise in the region. Last year it finished second just behind UBS in Dealogic's ECM league table ranking for Asia, and fourth in the CB rankings. However, its CB market share of 4.9% was well below the 22% and 19.6% share that the top two banks (Credit Suisse and J.P. Morgan) achieved.

And while it turned out some solid CB transactions for clients across the region last year, Morgan Stanley hasn't had a top-level origination banker specifically focused on CBs for some time.  

Observers say the hiring of Potel, Sandor and Dunnett should allow the US bank to make better use of its top-tier platform, including its equities, prime brokerage and global institutional client businesses, to carve out a bigger footprint in the Asia CB space as well. The new hires will be backed up by an existing team of sales people and equity capital markets bankers who make up the bank's primary CB business now.

Before joining Standard Chartered, Potel was a director and head of equity-linked origination for Asia-Pacific at Citi. He joined Citi in March 2005 after five years in equity-linked origination at Deutsche Bank in London, Hong Kong and Japan. Prior to that, he was pursuing a career as a barrister.

Sandor joined Citi's equity-linked team in Hong Kong in 2007. Prior to that, he was working with another bank in Australia. He joined Standard Chartered a couple of months after Potel.

Dunnett, who has a background with Credit Suisse, joined Standard Chartered in 2008 and is described in the market as "top notch" in her field. At Standard Chartered she was global head of the convertible bond business in Asia.

Indeed, the resignation of Dunnett, Potel and Sandor is a big set-back for Standard Chartered's efforts to become a credible player in the CB market. The bank is going after this market somewhat differently than most of the other investment banks as it is not fighting for every CB mandate out there, but rather is focusing on providing CBs as part of its overall product offering to existing clients. The bank has also been securing mandates on the back of its lending capabilities.

However, to keep this up, it will yet again have to start searching for new talent to fill the vacated positions.

Sources say that Potel and Sandor were not looking to leave Standard Chartered, but that the Morgan Stanley jobs were in the category of being too good to be turned down.

Earlier this week, Standard Chartered also lost its regional head of origination and client coverage for Northeast Asia when Charles Alexander resigned to take on a role as head of corporate banking coverage for Asia-Pacific at Bank of America Merrill Lynch. Like the CB team, Alexander was a relatively recent hire at Standard Chartered, having joined the bank just two years ago.