Goldman hit by prop traders leaving for hedge fund

Goldman Sachs is likely to see two senior traders leave its proprietary trading division to launch a new hedge fund in the second quarter of this year, reports say

Daniele Benatoff and Ariel Roskishas, both on the investment bank’s principal strategies desk, plan to launch a new London-based hedge fund.

It is already said to have secured a $300m (£193m) investment from Swedish hedge fund Brummer & Partners, one of the largest in Europe.

The move, if it goes ahead, will be the latest blow to the bank’s proprietary trading division.

On 10 January 2011, former executive director of the group and EMEA equity long-short portfolio manager Irina Miklavchich moved to multi-asset manager Threadneedle.

A month earlier, in December 2010, Goldman saw Asia-based Morgan Sze announce his intention to launch a Hong Kong hedge fund.
It was revealed in early September 2010 that the bank’s principal strategies business would be wound down.

Proprietary trading at investment banks has suffered as a result of changing regulation in the US.

The Volcker rule, part of the Dodd-Frank Act drawn up last year, prohibits the ability of banks to trade speculatively with their own capital.

Other banks have seen staff leave for alternatives managers recently.

JP Morgan lost Guillaume Ménabé, a former portfolio manager on its proprietary trading team, to Finisterre Capital.

Ménabé joined the firm as a junior portfolio manager on its Global Opportunity fund on 10 January 2011.

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