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Nomura Strengthens International Trading Through Lehman Buy

Nomura nabbed former Lehman execs to help build out its US trading operation.

While Barclays added Lehman's North American business, Lehman's Asia-Pacific, Europe and Middle East business was snapped up by Nomura Holdings. Meanwhile Nomura also moved to build a stronger U.S. presence, tapping former Lehman executives Sam Clapp, Amit Manwani and Kevin Brady to head up the firm's U.S. efforts.

Clapp, who was a senior salesperson in the electronic trading sales group at Lehman, now is executive director, equities. Manwani, who ran Lehman's U.S. systematic trading efforts, now is managing director, equities, and oversees the systematic trading group. Brady ran the global program trading sales organization at Lehman; he is also an equities managing director now.

The new Nomura, which already had a massive Asian operation before the acquisition and inherited a large European presence from Lehman, will feature a stronger U.S. presence and a more balanced global offering, according to Brady. "It's a chance to realign with the global products -- to leverage relationships and technology here in the States and take a nascent offering and grow into a bulge-bracket firm," he says. "We're starting with a fairly blank slate here in the U.S. It's a chance for us to take what we've learned and move into a next-generation product or model for a broker-dealer."

The group's trading platform will combine existing components of Nomura's global execution platforms in Europe and Asia with new U.S.-specific modules that are being written from scratch, Manwani reports. "It's a different story in each region," he notes. "In Europe [the work] was relatively easy -- Nomura didn't have a strong presence there while Lehman did, so the integration has been rather seamless. It's taken time and effort to reconfigure systems to operate under the Nomura name, but it's rather complete at this point."

Brady says Nomura kept about 95 percent of Lehman's trading floor staff and 100 percent across senior management levels. Globally, he adds, Nomura hired about 8,000 former Lehman employees.

Manwani explains that Lehman's presence in Japan was smaller than but complementary to Nomura's business. As a result the firm will stick with Nomura's regional offerings. "The integration in Japan has been rather straightforward," he says, adding that the Lehman personnel in the region who were retained were moved into the Nomura offices.

"The business is functioning quite well in Japan using the Nomura algorithm suite, so there is no immediate need for us to migrate them to another platform," Manwani continues. He explains that the algorithms used by the firm's program and cash trading desks had been customized by Nomura traders and work well.

In Europe, however, the firm will leverage an updated infrastructure and algorithmic trading offering that draws on legacy Lehman experience. "We are attempting to keep a uniform look and feel globally," says Brady. While historically Nomura operated with a regional focus centered around a massive Tokyo presence, now, "There is a big push to become a global bulge-bracket player," he reveals.

"Eventually we will move to one trading platform," adds Manwani, estimating that the convergence onto a single, proprietary platform, including the Nomura algo offering in Japan, likely will occur over the next six to nine months.

Meanwhile, Brady says, the firm is looking to hire to build out its U.S.-based business's front, middle and back offices. "We are looking to hire right now, and with the dislocation in the market it's an opportunity to pick up people who in years past we wouldn't have thought about," he comments. In May, for instance, Nomura announced that former Bank of America executive Dmitry Genkin would join the firm to lead a 14-person equity derivatives sales and trading team.

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