Irene Tse, the former Goldman Sachs Group Inc. (GS) partner hired by JPMorgan Chase & Co. (JPM)’s chief investment office to help manage the bank’s balance sheet while it boosted risk, is leaving to start a hedge fund.
Tse, 43, hired by New York-based JPMorgan less than two years ago as chief investment officer for North America, is starting her own fund early next year, said people with knowledge of the matter, requesting anonymity because her plans haven’t been announced. The fund will make investments based on trends in the global economy, the people said.
JPMorgan, led by Chief Executive Officer Jamie Dimon, has been curbing risk in the chief investment office after London traders built a position in credit derivatives that cost the firm $5.8 billion in the first half of the year. Tse’s departure deprives the unit of one of its most senior leaders following changes and dismissals that stemmed from the botched bets by U.K.-based trader Bruno Iksil, nicknamed the London Whale because the wagers were big enough to move the market.
Former Chief Investment Officer Ina Drew, 56, who retired four days after Dimon announced the initial losses on May 10, hired Tse in January 2011 to oversee North America. Tse came from Stanley Druckenmiller’s hedge fund Duquesne Capital Management LLC, where she spent three years as a portfolio manager trading mortgage securities and betting on interest rates, foreign exchange, credit, equity, commodities and structured products.
A Hong Kong native and concert pianist, Tse was a partner and co-head of U.S. rates trading at New York-based Goldman Sachs, which she left in January 2008 after 14 years at the firm. She also was a member of the Treasury Borrowing Advisory Committee, a panel of bond underwriters and dealers that meets quarterly with the U.S. Treasury Department on interest rates and government-bond sales.
Tse was among multiple executives hired by Drew after Dimon, 56, cleared the way for the CIO to invest in riskier securities, according to more than a half dozen former and current executives. Achilles Macris, who had been Tse’s counterpart in London until his departure in July, joined the bank in 2006 to help bolster its credit-trading operation. Iksil, who also left that month, reported to Macris, 51.
The division has unwound most of the money-losing position and transferred what remains of it to the investment bank, Dimon said July 13. Co-Chief Operating Officer Matthew Zames, 41, ran the division for four months after Drew’s departure, until Craig Delany, 41, was named to run the group last month.
“Irene will work with Craig Delany to ensure a smooth transition,” Zames told employees today in a memo about her departure, a copy of which was obtained by Bloomberg News. “She has worked closely with us over the past several months to refocus CIO back to its core mandate of conservative investing as we strengthened our risk management and controls.”
She is leaving “to focus on external entrepreneurial ventures,” according to the memo, which didn’t specify a date for her exit.
Delany’s goal is to trade “very high-quality assets that have little or no risk losing principal,” he said in a Sept. 6 interview. “The vast majority of the portfolio has an extremely steady, boring earnings stream that’s very conservatively invested,” he said.