The property derivatives market is looking perky. Don't bet on finding a job in the area just yet, though.
There are multiple indications that the temperature of the property derivatives sector is finally rising: Credit Suisse, Goldman Sachs, Merrill Lynch and Bank of America are launching a US property derivatives platform, several new property derivatives funds are being launched (take Bermuda-based Orn Capital, for example), and the cumulative value of UK real estate derivatives trades since 2004 is said (by Financial News) now to value 4.6bn, 3.7bn of which was clocked up last year.
Unfortunately, jobs don't seem to be keeping pace. Alex Tracey, managing director at recruitment firm Clifden Partners, says that a lot is expected of property derivatives in the future, but that banks are currently only at the stage of assessing the market. "We are not yet at the stage of banks creating their own teams. There is not a lot of expertise yet, so people are tending to move over from credit to work generally on non-corporate credit product development, which includes property."
By comparison, Tracey says asset-backed securities and credit default swaps are the two major areas of growth right now, with property coming in a distant third.