The latest in the path of the Volcker Rule’s carnage has taken out one of JP Morgan’s top guys.
Mike Stewart, the global head of proprietary trading based in JPM’s London offices, is leaving the firm to start his own hedge fund Whard Stewart, the Financial Times reported.
While the looming effects of the Volcker Rule has caused an exodus of prop traders to hedge funds, the latest move could have a overarching effects for JP Morgan and the hedge fund industry. Stewart was suppose to head up an Alternatives Unit at JP Morgan Asset Management—where most of the prop desks at JPM were moved to, and the departure of him and his team could be a blow to the bank, according to the Financial Times.
In contrast, Stewarts’ entrance into the hedge fund industry with such strong credentials could also mean fireworks. From the FT:
Whard Stewart is likely to attract significant interest from investors and will almost certainly be among the biggest new entrants into the hedge fund world this year, if not since the credit bubble burst in 2007.
Stewart will began work on his fund in the second quarter of 2012, the FT reported, citing sources close to the situation.