* Move comes as Mercuria closing purchase of JPM's business
* Mercuria has packed senior ranks with former bank
* Shenouda drove acquisitions at Goldman, expansion into
(Adds details, background)
By Dmitry Zhdannikov
LONDON, May 12 Fast-growing Swiss trading house
Mercuria has hired a former top executive from Goldman Sachs
to run its global commodities trading as it expands
further into territory abandoned by many top Wall Street lenders
under tighter regulatory scrutiny.
A high-level Mercuria source told Reuters that Magid
Shenouda, who was co-head of commodities for Goldman until the
end of last year and helped build one of the strongest trading
units among banks, had joined Mercuria.
Mercuria is closing a $3.5 billion deal to buy the physical
commodities trading business from another Wall Street giant, JP
"With the acquisition of JPM's business we will
substantially grow in size and are looking at a turnover of
$130-$150 billion," the source said.
The co-founders of Mercuria, Marco Dunand and Daniel Jaeggi,
will focus on managing the company with emphasis on integration
and client relations while Shenouda will run trading.
Shenouda was one of several recent senior departures from
Wall Street's most famed commodity trader, which has said it is
keen to keep the unit despite pressure from the U.S. Federal
The Fed is conducting a review while U.S. lawmakers raise
concerns that banks might abuse their roles in physical
commodities markets, or that the businesses pose risks to their
Shenouda is the latest high-level recruit from a bank by
Mercuria, which has packed its senior ranks with former bank
executives - unlike peers such as Glencore or Vitol,
which traditionally promote from within.
Mercuria has hired former Goldman executives Shameek Konar
and Victoria Attwood Scott to be heads of investment and
Unlike Goldman, many other banks are exiting commodities,
including JPM's selling to Mercuria, Morgan Stanley
planning to sell to Russia's Rosneft, and Deutsche
Bank and Barclays closing operations down.
Dunand, who has himself worked for several years for
Goldman, has said he sees Mercuria as building a model in
between banks and traditional merchants such as Vitol or
Shenouda joined Goldman in 1999 from privately held
Swiss-based commodity trading house Trafigura, where he traded
fuel oil. He went on to run Goldman's European crude oil and
products trading business, as well as European power and gas. He
was made partner at the bank in 2008.
At the time of his departure, Goldman said he had been
responsible for driving several acquisitions, as well as its
expansion into coal, freight and emissions trading.
Goldman's J Aron commodity division is a century-old
enterprise which the bank has said is "core" to its business.
Goldman President Gary Cohn ran J Aron for a period in the
1990s, and Isabelle Ealet, now the co-head of the securities
division, was in charge for much of the 2000s. It has about 250
It now faces unprecedented regulatory pressure amid
allegations its metals warehousing business might have inflated
aluminium prices. The Federal Reserve is considering ways to
pull back Wall Street's deep involvement in raw material
markets, including the ownership of assets.
At the same time, revenues at Goldman and other banks have
been shrinking as lower market volatility and tighter regulation
(Reporting by Dmitry Zhdannikov; editing by William Hardy and