After 20 years working for Banque Paribas (now BNP Paribas), Bernard Oppetit, former head of Paribas' global equity derivatives trading, is now a hedge fund manager. In August, he took a handful of his Paribas teammates, including Massi Khadjenouri and Randel Freeman, and set off to form London-based Centaurus Capital Management.

Within a short period, he raised $500 million (of which 150 million euros came from his former employer), racked up three consecutively profitable months, and closed his firm's funds to new investment. There have been speedy breaks from the starting block, but Oppetit's new effort looks truly fast-footed.

"I had long thought about starting a hedge fund,” says Oppetit, "but if I did it, I wanted to start big. When the BNP Paribas merger came along, the bank asked me what I wanted to do. I told them I wanted to set up a new hedge fund and asked whether they would be interested in investing. They said they would, and together with my own funds, I built from there.”

Oppetit did not want to build his new fund from within a large bank, however. "After 20 years, I wanted to be my own boss,” he says. "And I decided to concentrate just on risk arbitrage—mergers, spin-offs, and other event-driven strategies—primarily in the European market. The convertible arbitrage and options arbitrage people who worked for me stayed at BNP Paribas, and I just left with the risk arbitrage traders.”

Oppetit, who started the risk arbitrage business at Paribas in 1990 in New York, runs the fund without market-timing aspects or directional bias, using index futures and options as an overlay to his portfolio of event-driven deals. "Merger and event-driven strategies always have embedded risk of deals breaking,” he says, "and they tend to break, of course, when markets turn sour. We try to eliminate as much of this market exposure as possible by running some short futures and other option hedges.”

Centaurus also actively hedges away currency exposure derived from cross-continental mergers. "Some of the market participants entering into these deals may be doing so without currency hedges,” ventures Oppetit. "But we would never do that. It's just not our business.”

Oppetit claims that he occasionally looks at option volatility and convertible bond trades, but the true focus of his firm is event-driven strategies. If Paribas offered structured derivatives, for example, he says "it would really have to suit a specific need in our portfolio for us to take it on.”

Is Oppetit's new venture part of a new defection of equity derivatives traders from large banks?

It is more likely to be part of an ongoing trend. In 1998, equity option arbitrageur Andrew Royce of JP Morgan left to set up New York-based Onyx Capital Management; more recently, Russell Abrams, former head of Merrill Lynch's New York equity derivatives desk, left to start a new equity derivatives hedge fund.

The lure of being one's own boss is contagious, and for the right talent, raising sufficient capital for these new funds appears to be no problem.

Ever since Chase and JP Morgan announced a merger, the most popular guessing game downtown has been: "Who's coming out on top?”

The answers are finally in.

According to an internal memo, head derivatives honchos at the new JP Morgan Chase have been named and the organizational structure determined. And there are a few surprises, especially on the organizational front.

The new bank—which is likely to be the largest derivatives shop in the world once the merger between Chase Manhattan and JP Morgan goes through, probably next month—plans to broadly split derivatives trading, which is being merged into the cash business, into two principal units.

The first unit, which will be called Credit and Rate Markets, is a strange amalgam of credit, interest rates and foreign exchange. It will be co-headed by Chase's Don Wilson in New York and JP Morgan's Bill Winters in London.

The merger certainly seems to have made some odd bedfellows. Interest rate derivatives trading, for example, is being merged with foreign exchange, commodities and government securities. Foreign exchange options, hybrids, commodities, municipal derivatives and alternative assets will be grouped in a subdivision called Global Books Trading, headed by William Parsley (JP Morgan).

The unit's credit derivatives are being merged with underlying cash businesses in loan syndication, bonds, credit portfolio and structured products. JP Morgan's Bill Demchak will oversee credit portfolio and structured finance, covering credit derivatives, tax, asset-backed securities and collateralized mortgage-backed securities.

Sales, trading and research for Rate Markets will be divided geographically between North America, headed by David Puth (Chase), Europe, headed by Rob Standing (Chase), and Asia, headed by Bart Broadman (JP Morgan).

Finally, there will be a separate division for exchange-traded futures and options, which will be handled by David Pryde (JP Morgan).

Equity derivatives are being merged with the equity cash business in the bank's second main unit, to be called the Institutional Equities division. Steve Black (Chase) will head the division overall and New York-based John Corrie (JP Morgan) will handle equity derivatives.

Fraser Partridge (Chase) will be deputy head of cash equities and head of convertible program trading risk arbitrage. The Institutional Equities division will also shelter a Derivatives Management Committee, headed by Bill Winters, to oversee the integration of the firms' respective derivative businesses.

The small size of the new banks' proprietary trading operation, which will be headed by Doug Dachille (JP Morgan) is particularly striking. The proprietary trading unit will be subdivided into three divisions: global portfolio, co-headed by Patrik Edsparr (JP Morgan) and Yan Huo (JP Morgan); European portfolio, headed by Georges-Arnaud Saier (JP Morgan); and equity relative value, headed by Roger Bernheim (JP Morgan).

Finally, risk management functions will be handled by the Treasury Division, headed by Ina Drew (Chase). Alphea Duersten (Chase) will handle North America interest rate risk, Glenn Havlicek (Chase) will oversee North America short-term interest rate risk and liquidity, Andrew Panzures (Chase) will cover European interest rate risk and liquidity, while Paul Koehrsen (Chase) will manage interest rate risk and liquidity in Asia.

• The DPM Association of Chicago has named Jack Kennedy executive director. He has been a CBOE member and independent market-maker since 1978.
• Zar Amrolia has been named a managing director and co-chief operating officer for global foreign exchange at Goldman Sachs. He had been a managing director and head of corporate foreign exchange at Deutsche Bank.
• Credit Suisse First Boston has hired Bob Scanlon as a managing director and global head of emerging-markets credit. He had been the chief credit officer for Europe, the Middle East and Africa at Warburg Dillon Reed.
• ABN Amro Asia-Pacific Equities has appointed Michael Li and Patrick Hugh trading strategiests in the hedge fund sales department. Li had been a senior dealer on Banco Santander's Hong Kong proprietary trading desk. Hugh worked as a trader in ABN Amro's futures department.
• Lisa Polsky has departed from Morgan Stanley Dean Witter. She has joined Merrill Lynch's Securities Services Division, where she will head client services.
• ING Barings has named Takeshi Shinoda, who had been at Dresdner Kleinwort Benson Asia, a director and head of its securities finance department in Asia.