Sun, Feb 26, 2017
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
New Managers June 2012

Focus - Ex-prop traders meet the challenges and opportunities of the hedge fund world.

Ex-prop traders meet the challenges and opportunities of the hedge fund world

New entrants in the hedge fund world are no longer new, says Mark Israel, director at consultancy firm Sapient Global Markets (1). There are, for example, financial professionals who work at hedge fund firms and realise they can do it themselves, so they start out on their own.

Then there are hedge fund firms who find themselves underwater; those return the money to their clients and start anew. There are hedge fund firms who become too big and decide to sub-divide, giving birth to small hedge fund shops. There are other firms where a partner starts a different strategy under a different brand with a new independent status, while still sharing the same office space.

Then you have people leaving investment banking and entering the hedge fund arena, either by joining an existing firm or by setting up their own fund. Some industry experts share their observations on these ex-bankers with Opalesque.

In the U.S. most of those leaving investment banking and moving to the asset management industry are doing so because of the Volcker Rule. The Volcker rule, which is part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, prohibits depository banks from proprietary trading; this rule is similar to some provisions in the Glass-Steagall Act (1933-99) and came as a reaction to the 2008 financial crisis. The terms of the Volcker Rule will become effective on July 21, 2012 - and banks will have two years to comply. However, the date may be delayed as the five regulatory agencies drafting the Rule may not have submitted the completed version by then. Another problem is that lawyers cannot agree on whether banks should continue trading their own accounts during the next two years or not.

Proprietary trading has been one of the most profitable activities for banks. Ac......................

To view our full article please login

This article was published in Opalesque's New Managers a top-down monthly analysis, news and research publication on the global emerging manager space.
New Managers
New Managers
New Managers

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Institutional investors plan to raise allocations to alternative assets in 2017[more]

    Komfie Manalo, Opalesque Asia: A survey by Context Summits Miami showed that nearly 72% of institutional investors and family offices plan to raise their allocations to alternative asset managers this year, suggesting continued strong demand for the industry. "As many large, brand name f

  2. Comment - Mortgages, mergers and hedge fund fees, Fairholme's Berkowitz responds to court ruling against hedge fund suits of Fannie Mae[more]

    Mortgages, mergers and hedge fund fees From Bloomberg.com: Yesterday the U.S. Court of Appeals for the D.C. Circuit handed down an odd decision in a lawsuit over the government's nationalization of Fannie Mae and Freddie Mac. The key issue is what's called the "Third Amendment," the 2012

  3. Investing - Hedge funds continue to chase the herd in record Momentum wager, Marshall Wace bets grocer Sainsbury may need rights offering, Hedge fund net exposure has started to retreat, David Tepper's Appaloosa fund makes a huge buy, The 10,000-mile journey to Short Australia, Skeptical hedge fund investors grill Evan Spiegel about Snap's I.P.O.[more]

    Hedge funds continue to chase the herd in record Momentum wager From Bloomberg.com: Hedge funds can't get enough of momentum - even if it means embracing an investing strategy they hate. Loosely defined as betting on shares that went up the fastest over the preceding nine-to-12 months, h

  4. Opalesque Exclusive: Swiss investors take fund seeding and acceleration into their own hands[more]

    Benedicte Gravrand, Opalesque Geneva: Banque Bonhote, a 200-year old Swiss private bank, last year launched a community of investors - heads of Swiss family and advisory offices and wealth managers - with the aim of co-investing in the kind of managers they wanted to invest in, either by way of s

  5. K2 Advisors : Why We Like Activist Hedge Fund Strategies and Some Thoughts on Alpha[more]

    Matthias Knab, Opalesque: Rob Christian, Senior Managing Director, Head of Research K2 Advisors, Franklin Templeton Solutions, writes on Harvest Exchange: When d