Troy Dixon, a managing director who trades mortgage bonds at Deutsche Bank AG (DBK), is leaving after almost eight years and plans to start a hedge fund, according to two people with knowledge of the move.
He left the Frankfurt-based bank this week, said the people, who asked not to be named because the information isn’t public. Christopher Babu, who joined the lender in 2005, will replace him as head of trading for government-backed residential mortgage securities, one of the people said. Dixon and Renee Calabro, a spokeswoman, said they couldn’t comment.
Dixon, 42, joins former Deutsche Bank tradersGreg Lippmann, now at LibreMax Capital LLC, andBoaz Weinstein, of Saba Capital Management LP, in leaving the bank to start hedge funds. Premium Point Investments LP’s Anilesh Ahuja and Seer Capital Management LP’s Philip Weingord are other former colleagues who have started hedge fund firms since 2008 after departing the company.
Dixon’s focus is U.S. government-backed, or agency, home-loan securities, which have been roiled this year by concern that the Federal Reserve would slow its bond buying. Deutsche Bank is the top underwriter of collateralized mortgage obligations, which are mainly created by slicing up those notes into new securities, according to data compiled by Bloomberg.
Under Dixon, the bank was the largest trader of mortgage bonds with the Fed during the first round of the central bank’s debt buying known as quantitative easing, in which it purchased $1.25 trillion of the securities in 2009 and 2010, according to data released by the Fed.
He joined Deutsche Bank in 2006 from UBS AG to head pass-through mortgage trading. He had earlier held the same role at UBS, Credit Suisse Group AG and Donaldson, Lufkin & Jenrette. In 2011, Black Enterprise magazine named him among the 75 most powerful blacks on Wall Street, saying he then managed a “multibillion-dollar balance sheet.”
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