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Banking

Eurohypo Plans Property Derivative Push

Eurohypo is planning to expand its property derivatives business and to that end has hired Christophe Cuny in its London office. Cuny joins from ABN Amro, where he was the director of property derivatives structuring and distribution. One of Cuny’s mandates is to develop Eurohypo’s business so that it can offer asset-specific derivatives to clients and prospects by the end of 2009.

The bank has long been a player in the property derivatives market. Cuny said that he was attracted to the position because it would allow him to expand Eurohypo’s business into sector-specific and sub-sector trades. Most of the derivative trades are being done by banks via IPD’s All Property Index, he noted. "Property companies usually want something more precise," Cuny said.

Property derivatives are not a matching game, particularly in terms of factors such as time horizon and risks covered. "This part of the market is not very liquid. But in part because of the crisis we are experiencing, I believe that clients will want to hedge risk or take on synthetic exposure to a market or asset class, such as West End offices," Cuny added.

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