JonesTrading Institutional Services launched a distressed debt trading unit, according to Packy Jones, chairman. Anything thats difficult to trade, we trade, he said in an interview. At hedge funds, the guy trading distressed equity is also trading distressed debt, so it made sense for us.
He said client demand for the service led to its development. Kerry Stein, who joined the firm from investment bank Morgan Joseph & Co. Inc., where he was managing director and head of high-yield trading, manages the service. JonesTrading is not planning to hire a new group of traders to handle the business but will use its existing force of 85 traders.
Mr. Jones said that while JonesTradings main distressed debt trading clients are hedge funds and private equity firms, many of its traditional institutional investor clients also trade distressed debt. At many clients, 20% of their business is equities and the rest is other stuff.