BancBoston Robertson Stephens has hired four executives from J.P. Morgan & Co. to expand its equity derivatives business.
James Considine and James "Bud" Nagle both joined the firm as principals and traders, bringing the size of the equity derivatives trading staff to three.
Mr. Considine spent 12 years with Morgan, and Mr. Nagle five. Both were most recently senior equity derivatives traders.
Robert Meade joined Robertson Stephens as a principal and its sole equity derivatives research analyst. Warun Kumar came on board as a vice president of private client derivatives marketing.
The four men, who each held a similar position in Morgan's New York office, began work last week. They are based in San Francisco and report to Ed McCartin, Robertson Stephens' managing director in charge of equity derivatives. Mr. McCartin is also a trader.
"One of the needs of our client base is to hedge highly concentrated stock positions," Mr. McCartin said in an interview.
He said the unit will serve high-net-worth individuals and corporate clients formerly affiliated with either BankBoston or Robertson Stephens.
'We think of ourselves as a combined firm now. And we both had a similar client base before the merger," Mr. McCartin said.
Robertson Stephens handles all proprietary trading for the $73.5 billion-asset bank, according to a BankBoston spokeswoman. Mr. McCartin said his team is focused entirely on providing risk management instruments to clients.
Derivatives contracts, which have a value based on the performance of an underlying asset, let investors leverage their positions and realize larger gains or losses. When used conservatively, they can offset investment risk.
BankBoston is one of the country's 10 largest bank-based derivatives market makers, with about 35 executives in Boston that create products hedging fixed-income assets, interest rates, and currency fluctuations.
The Boston-based unit also has an emerging markets team that creates structured notes, repackaged assets, swaps, and credit derivatives. Most of the team's work is for financial instruments in Latin America, where BankBoston has had a presence for about 80 years.
Robertson Stephens has based the equity derivatives team in San Francisco because that is where its trading floor is located. There is also a five-member marketing team for equity derivatives in Boston, led by Robert Scott, BankBoston's managing director in charge of equity derivative sales. That team now reports to Mr. McCartin.
The former BankAmerica Corp. sold Robertson Stephens to BankBoston last year in preparation for its September merger with NationsBank Corp.
Robertson Stephens, which is largely an equities shop, had no previous reason to develop an equity derivatives team.
Its prior owner, BankAmerica, had a joint venture with the New York trading firm D.E. Shaw, which handled such business.
But the arrangement resulted in severe problems last fall when BankAmerica was forced to take a $372 million charge in the third quarter to allow for losses in D.E. Shaw's position.
