Former Deutsche bank trader joins Providence Equity Partners

NEW YORK – Ray Costa, Deutsche Bank AG’s former co-head of credit trading in North America, joined private-equity firm Providence Equity Partners Inc.

Costa, who focused on high-yield and distressed debt at Deutsche Bank, is a New York-based managing director at Providence’s credit arm, Benefit Street Partners. He was hired by Benefit Street’s chief executive officer, Thomas Gahan, who ran Deutsche Bank’s global capital markets division before starting the group in 2008.

“Ray is a seasoned leader and proven team player who will be a valuable addition to our team,” Gahan said in a statement provided to Bloomberg News. “He brings a deep understanding of credit markets, strong network of relationships throughout the industry and a proven track record of success across multiple investment cycles.”

Buyout firms and hedge funds have been recruiting from Wall Street as banks struggle to retain senior staff amid lower pay and heightened scrutiny from regulators. Chris Fahy, a former Deutsche Bank currency trader, was lured away earlier this year by Fortress Investment Group LLC, which has also added executives from Goldman Sachs Group Inc. and Citigroup Inc. this year.

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Strategies overseen

Benefit Street managed over $8.6 billion as of May 30 in strategies including middle-market private debt, long-short liquid credit, and commercial real-estate debt, according to its website. Its three senior managing directors, Richard Byrne, David Manlowe and Michael Paasche, also worked at Frankfurt- based Deutsche Bank.

Deutsche Bank, which is trying to stem revenue declines after the company shrank assets last year and lost staff, hired seven traders and analysts from competitors in May. They included Aaron Elliott, Citigroup’s former head of European financials credit analysis, Jeff Horan from Goldman Sachs, Mike Weir from UBS AG and Daniel Znaty from Barclays Plc.

Deutsche Bank was the world’s top bond dealer last year, according to Greenwich Associates, a research firm based in Stamford, Connecticut. The bank’s second-quarter profit fell 29 percent from a year earlier, while revenue from trading debt and foreign exchange was unchanged at 1.83 billion euros ($2.3 billion). The company’s shares have fallen 17 percent this year.

Benefit Street had about 24 dealmakers as of March, according to its website. The group in April closed Providence Debt Fund III, a pool that lends to mid-sized companies, with $1.75 billion, exceeding its $1 billion target. Providence, founded in 1989 and led by CEO Jonathan Nelson, oversees over $40 billion in private-equity holdings and credit assets.

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