Three Of Goldman Sachs's Star Prop Traders Have Been Snapped Up By Brevan Howard

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Karl Devine, who ran Goldman Sachs’s Global Macro Prop Trading desk in London, is decamping to hedge fund Brevan Howard, Financial News reports.

He’ll take two others with him– Brad Lord and Andrew Dausch.

The fourth member of the unit, Chris Tuohy, is joining Tudor Investment Corp.

The group will slot into the hedge fund’s flagship Brevan Howard Master Fund, which has $24.7 billion AUM, as global macro traders.

Devine will join as a partner, according to Financial News.

When news that Goldman was shuttering its super-profitable Global Macro desk to comply with the Volcker Rule first broke, there were rumours Devine and his team would go to $32.6 billion Brevan Howard.

The fate of the desk’s New York traders is yet to be reported.

The trio had reportedly been in negotiations with several hedge funds. They were offered the option of joining the firm’s Geneva office but chose to remain in London, at least for now.

Goldman closed its equity prop-trading unit, Goldman Sachs Principal Strategies, last year.

This is the latest in an exodus of the firm’s prop traders to hedge funds. With the bank’s effort to comply with the Volcker Rule and limits on trading with the firm’s capital, star traders like Morgan Sze, the former global head of principal strategies, launched his own Hong-Kong based fund in December. Others went to KKR.

The former head of the desk, Pierre Henri Flamand, retired from the bank and started his own hedge fund too.

Though Goldman (and other banks) are shutting prop desks to comply with Fin Reg, however, the practice of trading with the bank’s cash altogether has not ground to a halt. Rather, they’ve just figured out how to exploit the Volcker loophole, and transported whatever prop traders remain into client-based units.

Bankers haven’t been quiet about their intention to take on proprietary positions without breaking the new rules.

With Global Macro and Principal Strategies shuttered of course, that still leaves one: Special Situations.

Here’s why Goldman’s CFO David Viniar isn’t scared of the Volcker Rule >

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