Warburg Keeps Reeling Em In

Warburg Dillon Read hired two professionals for its leveraged finance business last week. The firm is also in the process of building up its high yield desk.

The two areas work in conjunction and report to Arthur Penn, is himself a recent hire.

The two additions are Brendan Dillon and Steve Rielly.

Dillon, formerly senior loan salesman at Lehman Brothers, will serve as head of loan sales for North America and South America. And Riley, formerly head of par loan trading at Lehman, will become Warburg's global head of loan trading.

The two recent hires came on the heels of Warburg's hiring of Chris Ryan, who also came over from Lehman in December to take over Warburg's global head of banking products.

Warburg, which ranked 14th for both 1998 and 1999 in the high yield market league tables, is determined to increase its market share via a series of top-name hires.

In fact, the week before Dillon and Rielly came on board, the firm hired Gina Hubbell and Michael Reddick to head a new high yield and emerging market collateralized debt obligation business.

Those moves, similar to the two more recent hires last week, were designed to form a new business concentrating on CBO's, one of the hottest new investor classes for the global leveraged and high yield markets.

Sal Naro, head of high yield and structured credit trading, said that the firm has made a formal goal of becoming one of the top players in the leveraged finance business (HYR 01/31/2000).

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

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 buyside last year.

While mutual funds bailed out of the junk market in large numbers for much of the fall, CDOs and CBOs arrived to pick up the slack.

Warburg's efforts to become a top-ranked high yield underwriter started in October when it hired Penn, who had been the head of high yield at BT Alex. Brown before BT's acquisition by Deutsche Bank.