Does Goldman Sachs Principle Strategies Want To Spin Out Prop Trading Tomorrow So It Can Be #1?

spin the bottle

Goldman Sachs might announce the spinning off of their prop trading unit, Principle Strategies, as soon as tomorrow, according to Reuters.

Morgan Sze is going to run the new fund, which will likely be run independently. He was promoted not even a month ago when Pierre Henri-Flamand left in March to start his own fund, Edoma.

What’s interesting about this, says Jeff Harte, an analyst speaking as a guest on CNBC, is that Goldman is moving first.

On Monday we found out that Morgan Stanley is spinning off their hedge fund, FrontPoint, within three months. Perhaps Goldman wants to be the first, before Morgan. One source at Morgan commenting on about Goldman’s announcing the spin-off told us:

“That’s not surprising. Once one firm moves, they all have to move.”

Also interesting is that CNBC’s Kate Kelly says that Goldman’s Special Situations group is not close to spinning off. They have prop traders, but they should be fine under the Volcker Rule. Goldman seems to hope to keep them.

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