Goldman Sachs Group Inc. (GS:US) is hiring former Deutsche Bank AG (DBK) banker Nicholas Pappas to head a distressed and high-yield debt team after the Wall Street firm reported higher revenue from fixed-income trading.
Pappas, 38, who was co-head of North American flow credit trading at Deutsche Bank in New York before leaving in September, will join Goldman Sachs’s London office, according to two people familiar with the decision, who asked not to be identified because it hasn’t been announced. Tiffany Galvin, a spokeswoman for New York-based Goldman Sachs, declined to comment.
Goldman Sachs is hiring Pappas as private-investment firms from Oaktree Capital Management LP (OAK:US) to Avenue Capital Group LLC raise funds to buy distressed debt in Europe, where leaders are seeking to contain a three-year fiscal crisis. Investors are funneling unprecedented volumes of cash into junk-debt funds as central banks globally purchase bonds to suppress borrowing costs and stimulate slowing economies.
Pappas is returning to the firm he left in August 2007 to join Deutsche Bank, according to records maintained by the Financial Industry Regulatory Authority. He departed Germany’s biggest lender as it cut compensation and jobs and after risk- curbing regulations changed the way banks broker debt.
More than a dozen credit traders have exited Deutsche Bank’s New York credit dealer since the beginning of 2011 as the lender capped cash bonuses at 100,000 euros ($129,470) last year. Antoine Cornut, who left Deutsche Bank two months before Pappas as head of flow-credit trading in the Americas and Europe, plans to start his own hedge fund, two people familiar with the matter said this month.
Credit trader Brad Visokey joined Barclays Plc to trade credit-default swaps tied to speculative-grade financial companies this month after leaving Deutsche Bank, where he worked for eight years. Athanassios Diplas, the firm’s global head of systemic risk management, also departed in October and became a senior adviser to the International Swaps and Derivatives Association Inc.’s board of directors.
Goldman Sachs, the fifth-biggest U.S. bank by assets, said last week that revenue from fixed-income, currencies and commodities trading gained 28 percent in the three months ended Sept. 30 from a year earlier, to $2.22 billion.
Investors have poured $35 billion in funds that buy junk bonds this year, compared with $16 billion last year, according to data maintained by JPMorgan Chase & Co. Distressed-debt investors such as Oaktree and Avenue Capital have been seeking bargain-priced assets from European companies with financial difficulties, nearing default or in breach of their contracts.
European high-yield, high-risk bonds have gained 22 percent this year, according to Bank of America Merrill Lynch index data.
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