ZURICH/LONDON Feb 15 JP Morgan's trader
Deepak Gulati is to give the Swiss hedge fund industry a boost
with the second-quarter debut of a major fund, a source close to
the matter said, in a tough environment for start-up managers.
His new firm Argentiere Capital was entered in Switzerland's
commercial register last July and has already raised a
substantial sum of money for the fund, the source said, although
he declined to confirm the sum or a fundraising target.
Publicity-shy Gulati, global head of equity proprietary
trading at JP Morgan, will take his team of 'black box' traders
with him, this person added, as the Wall Street giant looks to
cut its proprietary trading arms at the behest of regulators.
Many banks have shed their proprietary trading arms or
disbanded prop teams in response to the Dodd Frank Act of 2010,
which curbs banks' speculative bets with their own money.
The launch comes at a tough time for new hedge fund firms -
even star names spinning out of banks - as they battle tough
market conditions and investor nervousness.
Pierre Henri-Flamand, a former head of proprietary trading
at Goldman Sachs, said in November he would shut his fund
Edoma Partners, despite managing as much as $2 billion at one
stage, after poor performance and seeing its assets shrink to
Meanwhile, another high-profile launch, Azentus Capital,
which was set up by former Goldman trader Morgan Sze and which
also ran $2 billion at one stage, lost 6.8 percent in
performance terms in 2011 and gained only about 1 percent last
The Financial Times reported on Friday that marketers
expected Argentiere to raise as much as $500 million for its
launch. Such an amount would dwarf most launches this year.
"If you can start with $500 million... then you're really
off to a very, very advantageous start," said one prime broker.
"The single most difficult thing for aspiring new managers is
getting... new capital."
While most European hedge fund start-ups still plump for
London's upmarket Mayfair district or close by, Argentiere is
nevertheless one of several new fund launches slated in
Switzerland this year.
One industry executive, whose company both seeds and
provides services for emerging hedge fund managers, said his
company was working on four launches of funds ranging in size
from $50-$250 million scheduled for the second quarter.
A number of high-profile firms, most notably Brevan Howard
and BlueCrest, have shifted operations to Switzerland in recent
years. However, some traders have found life in Geneva expensive
or have missed London's buzzing night life.
"One of the difficulties of setting up in Switzerland is
getting the people - the CFO (chief financial officer), tech
people... In London there's a ready-made talent pool," the prime
Gulati's new fund is likely to be a so-called 'event-driven'
fund and focus on merger arbitrage, an investment style which
seeks to profit from price discrepancies following merger
In the company's registration Eamon Comerford, head of
trading at Derivative Partners Invest AG is listed as a board
member and signatory, while JP Morgan trader Michael Quinlivan
is also a signatory and is named as Argentiere's contact person
on the Swiss company database 'moneyhouse'.
Ernst & Young is named as group auditor.