Stewart Said to Leave JPMorgan to Start Hedge Fund in London
Mike Stewart, who JPMorgan (JPM) Chase & Co. picked last year to oversee a unit of traders being moved out of its investment bank, has left to start a hedge fund, according to two people with knowledge of the matter.
Stewart, 38, and a team of at least four other JPMorgan traders have founded Whard Stewart Asset Management Ltd., said the people, who declined to be identified because the bank hasn’t announced his departure. JPMorgan picked the London-based Stewart in February 2011 to oversee a team of about 50 traders it was transferring to an asset-management division to comply with new U.S. rules that restrict banks from betting on markets.
Stewart joins a growing group of traders who have left firms including Goldman Sachs Group Inc. (GS), Citigroup Corp. and Morgan Stanley (MS) as banks reduce risk in the face of greater regulation after the financial crisis of 2008. The U.S. in 2010 approved the so-called Volcker rule, which was named after former Federal Reserve Chairman Paul Volcker, to curtail banks from using their own capital to make wagers on stocks and bonds.
A JPMorgan Chase spokesman declined to comment. Stewart didn’t immediately respond to an e-mail seeking comment.
JPMorgan, the largest U.S. bank by assets, planned to comply with the Volcker rule by raising capital from outside investors for Stewart and other traders in the asset-management unit. The Volcker provision hasn’t yet taken effect.
Stewart had been co-head of New York-based JPMorgan’s global emerging markets business. Whard Stewart will focus on investing in emerging markets, said the people. JPMorgan employees who have joined Stewart at his new hedge fund include Alexis Hombrecher, Darrell Tonge, Robert Gilraine and Matthew Haydon, according to a Jan. 17 filing with the U.K.’s Companies House. JPMorgan has no plans to invest in Whard Stewart, one of the people said.
The Financial Times reported Stewart’s plans earlier today.
Proprietary traders who remain at JPMorgan include Deepak Gulati, who leads stock investing, and Fahad Roumani, who heads investments in credit.
Traders have been leaving banks to start or join hedge funds since U.S. lawmakers approved the Dodd-Frank Act in 2010. The law, which includes the Volcker provision, increased oversight of Wall Street in response to the worst economic slump since the Great Depression.
Sutesh Sharma, who led a proprietary-trading desk at New York-based Citigroup, is starting a hedge fund in London called Portman Square Capital LLP. Pierre-Henri Flamand stepped down in 2010 as head of a unit at New York-based Goldman Sachs that traded equities to form Edoma Partners LLP.
Money managers started more than 1,100 hedge funds in 2011, the second-highest annual total, according to Singapore-based data provider Eurekahedge Pte.
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