Mon, Dec 22, 2014
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. Investing - Big hedge funds win again on PetSmart, Riverbed, RBS sells real estate loans to hedge fund Cerberus, Talisman energy speculation: Which hedge funds could benefit?[more]

    Big hedge funds win again on PetSmart, Riverbed From CNBC.com: Another week, another set of wins for activist investors. On Sunday, pet supply retailer PetSmart agreed to the largest leveraged buyout of the year at $8.7 billion. Hedge fund firm JANA Partners had been pushing for a sale a

  2. Outlook - Hedge fund manager who remembers 1998 rout says prepare for pain, Bond guru Bill Gross predicts U.S. economic growth to dip to 2%[more]

    Hedge fund manager who remembers 1998 rout says prepare for pain From Bloomberg.com: Stephen Jen landed in Hong Kong in early January 1997 as Morgan Stanley’s newly minted exchange-rate strategist for Asia. He was soon working around the clock when investors began targeting the region’s

  3. Investing - Hedge funds get boost from healthcare in 2014, Paulson & Co takes stake in Salix on heels of inventory issues[more]

    Hedge funds get boost from healthcare in 2014 From Valuewalk.com: The healthcare sector started the year on a turbulent note, as stocks of many major biotechnology companies were battered. However, most of the players in this sector have bounced back. The BarclayHedge Healthcare & Biotec

  4. North America - Why Steve Cohen, Connecticut hedge fund billionaire, gives so much in New York[more]

    From Insidephilantrophy.com: Billionaire Steve Cohen was born in Great Neck, New York before attending Wharton, working on Wall Street and then founding SAC Capital Advisors in Connecticut. Though his company (Point72) and foundation are based in Connecticut, Cohen and Alexandra are deeply connected

  5. Investing - Soros buys a highly speculative biotech in the third quarter[more]

    From Fool.com: …The Soros Fund bought 25,000 shares of the struggling small-cap biopharma Aegerion Pharmaceuticals in the third quarter. For those of you who haven't heard of this name, suffice to say that this was a surprising buy in light of the company's recent problems and poor outlook going for