Wed, Nov 25, 2015
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. Investing - BlackRock targets ETF investors with flexible currency hedging, Nelson Peltz bets on General Electric Company and Mondelez International, Apple plummets to 4th place among hedge holdings, from No. 1, Top Q3 equity purchases and sales of top 50 hedge funds[more]

    BlackRock targets ETF investors with flexible currency hedging From BlackRock Inc., the world’s largest asset manager, is changing course on exchange-traded funds that protect against currency volatility. After stressing the easy switch between hedged and unhedged ET

  2. Chicago-based Achievement A. M. is shutting down hedge fund following losses[more]

    Komfie Manalo, Opalesque Asia for New Managers: Achievement Asset Management, a Chicago-based hedge fund firm, has announced it is closing down its hedge fund operation following losses on energy market bets this ye

  3. Lyxor Hedge Fund Index up 0.1% (+0.4% YTD) as global macro and CTAs outperform[more]

    Komfie Manalo, Opalesque Asia for New Managers: Global macro and CTAs outperformed the hedge fund space and delivered positive returns last week amidst difficult market conditions, with the Lyxor Hedge Fund Index up

  4. BlackRock is shutting down its Global Ascent macro fund[more]

    Komfie Manalo, Opalesque Asia: BlackRock, the world’s largest asset manager, has announced plans to shut down a macro fund, Global Ascent Fund, because of "headwinds facing the industry". The hedge fund, which makes bets on stock, bond and currency markets, will return money to investors. Ac

  5. Opalesque Roundtable: Seeding deal terms can be onerous for hedge funds[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: Executives from fund of funds firms, family offices, a placement agent, a private equity firm, and an accounting firm gathered in Connecticut last month for the