ICAP's new structureds team hopes to combine experience with technology, education, division heads say

By Kenneth Lim

Boston, June 18 - The heads of ICAP plc's new structured products team hope to combine their experience at LaSalle Bank with the technological prowess of ICAP's broking services.

"We are starting with a blank slate," co-head John Tessar told Prospect News. "We came in with our own vision, something like a three-year plan, and ICAP agreed with our plan, and here we are, starting from the ground up, simply from the blueprint of what we learned from five plus years at LaSalle."

ICAP has created a new structured products division, called SPX, that will mark the interdealer broker's entrance into the structured products market. Led by LaSalle veterans Tessar and co-head Ed Coach, the division will compete against well-entrenched names like Advisors Asset Management, Inc. and Incapital LLC.

Other former LaSalle employees who have jumped to ICAP are Krista Martin, John Korody and Eric Moskoff. Countrywide Securities Corp.'s Chris White and Alex Ciccotelli from HSBC Bank USA are also joining the team.

"When LaSalle was folded into Incapital, we had left over there and started the negotiations with the folks at ICAP," Tessar said. "We were lucky enough that we could keep the heart of the structured products group at LaSalle, which was Ed Coach and myself ... and John Korody and Eric Moskoff, we were the ones who were establishing the products and sales channels. The entire group has moved over, together with one of the better sales reps in Krista Martin. And we also acquired Chris White from Countrywide and Alex Ciccotelli from HSBC."

"What we want to do is try to leverage a lot of the experience that we had at LaSalle with the dealers and the street," Tessar added. "We were really fortunate at LaSalle to get a good grip of the issues that face the issuers as well as the dealers."

London-based ICAP, which provides voice and electronic services, has the resources to help the new team pull off its vision, Tessar said.

"For ICAP this is a great opportunity to get involved in an asset class, an investment class, that was of great interest to them," he said. "Of great interest to us is that ICAP is a huge company, and it's almost like a technology company. ... As we develop out our platform, we'll be greatly reliant on the technology that they have."

Tessar said the new division will look to address three key areas. The first is education about structured products, then access to information and finally the ability to trade based on that information - "and try to put that all in one place," he added.

In terms of education and information, the team is looking beyond teaching about specific products.

"Going forward the attention is not so much on products but on processes," he said. "Not what we're distributing but how we're distributing it. Not so much what are the benefits that the product delivers, but the overall benefits of structured products to a portfolio. It's a little like how when you're talking about stocks you're moving away from buying an individual stock and looking at the whole portfolio."

Coach added that education about structured products in general will help innovation in the market.

"If you talk to anybody in our business, a product that really should be a success ... is the idea of these buffered levered notes," Coach said. "For whatever reason, they have not seemed to garner as much attention from investors as products like reverse convertibles or CDs. I think we all agree that it's a great product. That's where I think the opportunity lies."

The division is looking to work with all the issuers and has already put out "a number of new deals for Barclays" this month, Tessar said. The division is also in talks with other issuers and should be offering their products soon, he said.

"Our goal is to work with every single issuer who is willing to work with us," he said. "We want to be one of the central meeting places for the industry."

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