Hedge fund partner hired by Morgan Stanley to run FX desk

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In another sign that investment banks are stepping up efforts to stem the talent flow to the buy-side, Morgan Stanley has hired a partner from a hedge fund set up by JPMorgan prop traders just two years ago.

Robert Gilraine, a former partner at Whard Stewart Asset Management, joined Morgan Stanley as head of local currency and FX trading this month, according to sources close to the situation. Morgan Stanley confirmed the appointment.

Mike Stewart, JPMorgan’s former co-head of emerging markets, led a team of traders out of the bank to start Whard Stewart Asset Management in March 2012. Stewart was due to oversee a team of around 50 traders at JPMorgan, who were to be transferred across to its asset management division to avoid the regulatory crackdown on prop trading within investment banks under the Volcker rule.

Gilraine was among a handful of JPMorgan traders to be swayed across to Stewart’s new venture in 2012 and joined as a partner. He has a background in emerging markets, the focus of Whard Stewart’s investment approach, but will be working on FX and currency markets at Morgan Stanley.

Morgan Stanley has managed to increase revenues in its fixed income currencies and commodities (FICC) division, by 35% year-on-year in the first quarter, while most other banks have seen double digit declines. It’s been investing in senior staff within its FX division – in February it named Shamyl Malik, a former Citi trader, to run its FX electronic trading business in London and is currently advertising for roles.

Following the departure of the team of prop traders to Whard Stewart, JPMorgan also lost other senior staff. Deepak Gulati, its former head of global prop trading, set up Argentiere Capital in the middle of last year in Zug, Switzerland and has persuaded around eight JPMorgan staff to join the venture.

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