One can only imagine the dollar signs sparkling in the eyes of ex-Goldman Sachs traders Pierre-Henri Flamand and Morgan Sze, as they left the illustrious investment bank to raise $4.5 billion for their own hedge funds. But these two join four other Goldman alumni who, according to a Bloomberg article, left the firm’s largest proprietary trading group in the past couple of years with the promise of independent riches – only to falter. None of them, the story states, have made any money for their clients.
Said one hedge-fund investor: “I’ve spoken to Goldman traders who’ve told me they have a network across the street and the world. When you are at Goldman sitting on a $10 billion prop desk, everyone is your friend. When you are on your own at a hedge fund, you find out who your real friends are.”
The struggles can be blamed on a tough economy, and the difficulties inherent in running a hedge fund, which are void of the rich research and sales teams found at investment banks, but loaded with finicky, risk-adverse clients.
Meanwhile, Bloomberg today also announced that Goldman credit traders Matthew Knopman and Philip Ha are leaving Goldman to start their own hedge funds. Knopman will start Anchorage Capital Group, while Ha will join MKP Capital Management.
Goldman may incorporate electronic trading into its fixed income unit. [Financial Times]
Barclays CEO calls Q1 “pleasing.” [NY Times]
TD Bank expects a slowdown in growth in Canada. [Bloomberg]
Deutsche ranks as the biggest European bank. [Bloomberg]
Jefferies is starting a corporate lending business in Europe. [Financial Times]
Palamon’s wealth manager, Towry, is looking to go public within the next 18 months. [Financial Times]
China's banks began a wave of capital raising that could bring in billions of dollars. [WSJ]
Edward Jones stopped selling Hartford's life insurance and annuities. [Investment News]
Some buyout firms will give investors more say in how their capital is used. [WSJ]
Ten fund firms with the most Twitter followers. [Investment News]
The ruling family of Abu Dhabi is considering a stake in RBS. [DealBook]
Resolution, an insurer created in 2008, might break up. [Reuters]