March 5 (Bloomberg) -- Mike Stewart, JPMorgan Chase & Co.’s global head of proprietary trading, plans to leave the bank to start his own hedge fund and take some employees with him, according to the Financial Times.
Stewart, who took over the unit in February 2011, will start the Whard Stewart hedge fund in the second quarter, and members of the emerging-markets trading team that he previously led are expected to join him, the newspaper reported, citing unidentified people familiar with his plans.
Banks are winding down some proprietary-trading operations ahead of U.S. rules that restrict deposit-taking institutions from making bets with their own capital. The so-called Volcker rule, a provision of the Dodd-Frank Act that limits risk-taking, would prohibit lenders from investing more than 3 percent of Tier 1 capital in hedge funds or private-equity funds.
JPMorgan said in 2010 that it planned to move proprietary traders in the emerging-markets, structured-credit and equity units to the asset-management division, with Stewart overseeing the shift. Deepak Gulati, the global head of equity proprietary trading who’s going to move into the asset-management unit with his traders this year, also is considering whether to start a fund, the FT said, citing people with knowledge of his thinking.
Jennifer Zuccarelli, a JPMorgan spokeswoman, didn’t return an e-mailed request for comment and an attempt to reach her by telephone was unsuccessful.
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