Goldman Sachs star trader Morgan Sze’s plans to raise over $1bn (£640m) for an Asia hedge fund could be a sign of things to come as traders who run own-account trading desks prepare for a Wall Street regulatory clampdown.
Hong Kong-based Sze, head of Goldman’s principal strategies group, is to quit to form Azentus Capital, likely one of the biggest hedge fund launches since the onset of the credit crisis and which will have a team of close to 30. Goldman Sachs declined to comment.
The move comes as Goldman and other Wall Street banks wind down their proprietary trading desks in light of the “Volcker rule”, named after the former Federal Reserve chairman who authored the regulation to limit the extent to which banks can bet with their own capital.
Banks are considering options such as spinning out desks as separate hedge funds or moving them into their asset management units. Morgan Stanley is spinning out FrontPoint Capital while JPMorgan is reassigning its proprietary traders to its asset management unit.
City A.M. Reporter