Inside Nomura's new equities business
As we noted in July, Nomura, the Japanese bank which has something of a reputation for getting in and out of businesses, is getting back into equities in Europe the Middle East and Africa (EMEA). Simon Yates, Nomura's New York-based head of global equities, and a former CEO of Two Sigma Securities, told Bloomberg that the bank is making an EMEA comeback. As it builds across cash and synthetic prime brokerage, corporate derivatives, delta one and quantitative investment services, Nomura has already hired 30 new people.
The man actually responsible for driving Nomura's new equities aspirations has been in situ for a while, though. Glenn Fairbairn joined the bank in 2021 as an MD and head of equity solutions trading and prime finance for EMEA. He previously spent 13 years in equities at Deutsche Bank.
Fairbairn was made head of equities EMEA and head of international prime finance in 2021. It's he who is understood to be leading the London build.
Nomura declined to comment for this article and Fairbairn didn't respond to our messages, but Nomura insiders and headhunters say the new business - which Yates said will be "lighter cost base" and "not full-service", with a lower headcount - will build on Nomura's strengths.
Nomura closed much of its European equities business in 2016, when sources say it was horribly overstaffed. "The cost base was way too high and there was no way it could be profitable," says one senior equities headhunter, speaking off the record as he works closely with Nomura. "They were trying to do everything, and that was never going to work. They had maybe 150 salespeople and traders, like a big US bank in London."
The new build under Fairbairn is understood to be very different. Instead of chasing every area of the equities business, Nomura plans to build on its existing strengths and to keep costs under control.
Building in prime finance
Key to Nomura's new EMEA aspirations is prime finance. The bank still operates a prime finance platform in Japan, elsewhere in APAC, and in the US. Most of its global prime finance business is booked in Europe, but Nomura officially closed its EMEA prime finance business in 2021 after losing $2.9bn on the collapse of the Archegos family office.
After spending the past few years improving the risk and control systems in its prime finance business, sources say Nomura is now relaunching the business in Europe, and is hiring accordingly.
Somesh Sharma, Nomura's London-based head of global prime finance risk, joined from Credit Suisse in 2022 and was promoted to MD this April. Since arriving, Sharma has been adding to his team globally, hiring people like Shi Ai Yang in Asia last July. Under Sharma, Nomura's prime finance risk team is thought to number around five people, which is five more than it had prior to his arrival.
The new recruits will build on this base. "They have the prime platform, it's about adding salespeople and traders," says the London headhunter.
Prime finance has long been the gateway to a strong quantitative equities business. With his hedge fund background, this is what Yates is pushing.
Not hiring exclusively in Europe
In his July interview, Yates gave a long list of people Nomura had hired since January. As the bank builds out across cash and synthetic prime brokerage, corporate derivatives, delta one and quantitative investment services, the recruits aren't only in Europe but are global.
In Europe, Yates said 2023 recruits included: Keyvan Zolfaghari from Goldman, Michael Witzenfeld from Credit Suisse, Rob Hammond from Mitsubishi UFJ, Stephane Redon from Bank of Montreal, and Stela Modrakovic, Stephanie Peritore and Aous Labbane. In the US, they were: Joshua Lukeman and Susan Enright from Credit Suisse, Ganapathy Pattabiraman from Deutsche Bank AG and Jason Jerutis from Bank of America. Asian hires cited by Yates included: Arnaud Lannic and Florence Lam, from Bank of America, Clement Florentin from Credit Suisse, and Hally Seo and Harvey Zhang from JPMorgan.
Sources at Nomura say there have been new additions since then. Sandeep Bidani joined from CIBC in July as head of delta one products and structured product sales, based out of New York. In London, Nomura has recruited Stephane Redon from BNP Paribas to build a delta one desk. Further hires are expected.
"They are in growth mode, but they are being very selective both with hires and with clients," says the headhunter close to Nomura's plans. They need to be: costs consumed 99% of revenues in the wholesale business in the last quarter.
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