KBW Looking to Expand MBS Presence
Keefe, Bruyette & Woods, Inc. (KBW) says it is looking to bulk up its presence in the mortgage bond business, hiring two well-known mortgage bond traders on Tuesday. In a press statement earlier this week, the company said it had hired Peter Ma, who will lead the firm's efforts in the non-agency market, and Greg Hargraves, who joins the firm as senior agency pass-through trader. Both are seasoned vets in the MBS space. Ma has spent more than 20 years in the business, and was most recently executive director on the MBS trading desk at UBS AG (UBS). Hargraves has spent nearly his entire career at Merrill Lynch, where he was senior Ginnie Mae trader and had responsibility for the firm's middle markets mortgage business. Both will both report to Don Ullmann, head of KBW's MBS and agency trading areas. The company says it may be looking to expand its team further in the MBS space. “What we are looking at here is a huge opportunity to be able to attract some very bright and talented people that have been in the business for a long time [and] that have been displaced for various reasons,” Craig Coats, executive vice president of fixed income at KBW, told Investment Dealers Digest earlier this week. “At the moment we’ll continue to look for opportunities that come along.” “With these outstanding new hires, we have broadened and deepened our ability to execute value-added trades for our customer base,” Coats said in a press statement. KBW representatives told IDD that the company's MBS business is currently splite "evenly" among agency and non-agency mortgages -- but that it is expected to see the non-agency side of the business grow as we move into the back half of 2009, certainly an interesting sentiment in the market right now. "A lot of firms have stopped using their balance sheet. We don't use alot of balance sheet. We generally tend to work on orders. We will position securities on the fringe, but we're not a big balance sheet user," Coats told the news service. Write to Paul Jackson at firstname.lastname@example.org. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.