Warburg Continues to Beef Up HY Desk

The latest move in Warburg Dillon Read's ambitions to be a top-ranked high yield underwriter came with its recent hire of two Wall Street pros to form a new business concentrating on the junk market's hottest new investor class.

"The firm is mandated that we become a top player globally in the leveraged finance business," said Sal Naro, head of high yield and structured credit trading.

Last week, Warburg hired Gina Hubbell and Michael Reddick to head a new high yield and emerging market collateralized debt obligation business. Hubbell, who will serve as executive director and head of the group, formerly served as a partner at investment management firm J.H. Whitney & Co. and also is a veteran of Credit Suisse First Boston.

Reddick, another J.H. Whitney alum, will serve as associate director in the group, reporting to Hubbell.

Warburg, which ranked 14th for both 1998 and 1999 in the junk market league tables, is determined to change its lot via a series of top-name hires. It hired away former BT Alex. Brown high yield head Art Penn late last year, and spent much of the early winter building up a shop for Penn to run.

Warburg's push to develop a CDO business is no surprise, given the impact the relatively new asset class has had on the junk market's buy side last year. While mutual funds bailed out of the junk market in large numbers for much of the fall, CDOs and collateralized bond obligations came in to pick up the slack.

"The CDO business is critical to the fixed income markets as it allows securities to be tranched to fit individual appetites for risk," Naro said. "There's a tremendous amount of CBO bids driving the market."

Warburg's hiring tear is not over yet, as the company looks to further expand its reach into areas of its high-yield business that need shoring up.

In fact, last week senior analyst Aryeh Bourkoff said he is looking to hire a wireless analyst soon. He didn't give a specific time frame, but given the constantly changing nature of the sector, he said he wants to have somebody in place as soon as possible.

And Bourkoff himself is a recent hire, coming over from CIBC World Markets as senior telecom analyst, specializing in wireline telecom and cable television companies along with managerial responsibilities over the group.

Bourkoff was the fourth ranked analyst to join WDR since November. Others included Bill Hoffmann in the forest products sector, Bill Crowley in heavy building materials, and Rick Miller, a metals analyst, managing director and head of all high yield research.

And one banker said he expected the shop to make further hires in Europe this year, as well. - Christopher O'Leary/LC