Credit Suisse hires hedge fund chief
Erin Callan, who was forced to step down as chief financial officer at Lehman Brothers after just six months in the role, has moved to Credit Suisse.
Credit Suisse said in a statement that Callan will be joining the bank as head of its global hedge fund business from September 2.
In this newly created position, she will be based in New York and will join the investment bank management committee and the global client steering committee.
She will work with prime services, the financial institutions group and the global markets solutions group to lead Credit Suisse's strategic advisory and coverage efforts for hedge funds.
Callan had been at Lehman for 13 years and was made chief financial officer at the beginning of December.
In June, Callan and chief operating officer Joseph Gregory were removed from their positions just days after Lehman tapped the public equity markets for the second time in less than three months to raise $6bn (€3.8bn) in fresh capital and after admitting that writedowns and losses from hedges and principal trading would cause its first quarterly loss since going public.
At the time, Brad Hintz, an analyst at Bernstein Research, said: “In general, we view these changes as necessary. The action of Richard Fuld [chairman and chief executive] and the board shows senior management is aggressively responding to and attempting to quell market concerns.”
Lehman Brothers has lost three quarters of its value in the past 12 months and closed yesterday at $13.22.
This week Hintz said that in its latest quarterly report Lehman is making progress on improving funding and deleveraging the balance sheet although the balance sheet is still not yet “bulletproof.” His report said Lehman's commercial paper outstanding rose to $7.9bn at the end of May from $3.1bn at the end of the fourth quarter.
In June, Lehman had said Callan would be rejoining its investment bank in a senior capacity.
Prior to becoming chief financial officer, Callan had run global hedge fund coverage at Lehman. She joined the bank in 1995 and became head of the bank's global finance solutions group.
She went on to run a global hedge fund coverage group, where she forged strong relationships with alternatives managers Fortress Investment Group and The Blackstone Group. She played a prominent role in helping both firms structure their balance sheets in preparation for going public.
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