Another day, another handful of traders fleeing large investment banks for hedge funds. This time, Bloomberg News reports, it is two Goldman Sachs Managing Directors joining Citadel, Kenneth Griffin’s giant hedge fund, which is based in Chicago.
Uberto Palomba, co-head of Goldman’s emerging markets trading, and Jonathan Tipermans, Goldman’s head of dollar-swaps trading, will be working for Citadel’s Global Fixed Income Fund, a unit that was started in 2008 and has been picking off seasoned bank veterans ever since.
Some observers have attributed this sort of thing to the 2008 Dodd Frank financial reform legislation—specifically, the Volcker Rule, which mandates that banks stop speculating with their own money. As banks have begun winding down their in-house trading desks to comply with the rule, many traders have headed to places like Citadel.
But the trend was under way well before Dodd Frank and will surely continue for one big reason: The moneymaking possibilities at hedge funds are much, much greater than they are almost anywhere else.
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