Fortress Adds FX Firepower From Citigroup, Deutsche BankDakin Campbell and Devin Banerjee
Fortress Investment Group LLC hired two foreign-exchange specialists including Citigroup Inc.’s Jeffrey Feig, taking advantage of turmoil at global currency dealers to bolster its hedge funds.
Feig, 47, will be co-president of Fortress’s Liquid Markets business and co-chief investment officer of the Fortress Macro Fund, the New York-based company said today in a statement. Fortress also hired former Deutsche Bank AG currency trader Christopher Fahy for the liquid-markets business, which oversees $7.7 billion including the firm’s macro funds, said Gordon Runte, a Fortress spokesman.
Feig’s “expertise in global markets is an ideal fit for the macro fund and his experience with investors will be invaluable,” Stu Bohart, co-president of Fortress’s liquid-markets unit, said in the statement.
Foreign-exchange traders are leaving global banks as cost-cutting, automation and more scrutiny from regulators roils their industry. Authorities on three continents are investigating whether people working at currency dealers tried to rig the $5.3 trillion-a-day foreign-exchange market. Citigroup and Deutsche Bank, the two largest, have dismissed or suspended several traders.
Feig’s hiring seeks to broaden the investment management talent at Fortress’s macro funds, according to the statement. The global macro funds, which manage $3.8 billion, have lost 6 percent this year through May, according to a June 5 regulatory filing. Its Asia macro funds, which manage $2.9 billion, have declined 5.1 percent, the filing shows. Fortress shares dropped 11 percent this year through yesterday, trailing the 4.8 percent gain of the Standard & Poor’s 500 index.
Fortress’s liquid-markets business includes the firm’s macro funds, which invest across products and geographies, as well as a fund-of-funds vehicle. The group, started in 2002 by Michael Novogratz, invests in assets including foreign-exchange instruments, bonds, stocks, commodities and related derivatives.
Fahy, who joins Fortress as a managing director, was dismissed from Deutsche Bank’s New York office for inappropriate communications, Bloomberg News reported in February, citing a person with knowledge of the move.
Sebastian Howell, a spokesman in London for Frankfurt-based Deutsche Bank, declined to comment and Fahy didn’t respond to e-mail and phone inquiries.
Feig will stay with Citigroup through the end of the month, said Danielle Romero-Apsilos, a bank spokeswoman. His departure was voluntary, according to a person familiar with his thinking, who asked for anonymity because personnel changes are private. He’ll join Fortress in the second half of the year, according to the statement.
A replacement for Feig will be announced shortly, Citigroup said in an internal memo. Feig has previously served as chairman of the Foreign Exchange Committee, a group of firms formed in 1978 under the sponsorship of the New York Federal Reserve.
Feig’s move follows the exit of Anil Prasad, Citigroup’s former currencies chief, whose departure was announced by the New York-based lender in February. Prasad’s exit also was voluntary, a person familiar with his thinking said at the time. The bank named Nadir Mahmud to succeed Prasad.
“Given their tenures in their roles, these departures were well-anticipated, and part of the natural cycle of the business,” Romero-Apsilos said in an e-mailed statement. “We have a strong, talented bench that continues to support this core business.”
Citigroup has picked up market share in currencies, wresting the No. 1 ranking from Deutsche Bank in the latest survey conducted by Euromoney Institutional Investor Plc.
Feig couldn’t immediately be reached for comment. “There’s no question it’s harder now to figure out how to operate in a much more regulated environment than it was a decade ago,” he told the Wall Street Journal.
Feig oversaw all of Citigroup’s foreign-exchange sales and trading in the developed markets, according to his corporate biography. Born in Toronto, Feig joined a Citigroup predecessor in 1989 as an associate on the foreign-exchange desk in the Canadian city.
Citigroup has fired at least one currency trader in the wake of the regulatory probes, dismissing Rohan Ramchandani, the bank’s head of European spot trading, in January. Two other traders were put on leave, another person with knowledge of the matter has said.
Deutsche Bank said in April that its global head of foreign exchange, Kevin Rodgers, will retire in June. His decision wasn’t prompted by the inquiries, according to a person briefed on his plans.
Royal Bank of Scotland Group Plc, Lloyds Banking Group Plc, Citigroup and Deutsche Bank are among the dealers reviewing e-mails, instant messages and phone records of their foreign-exchange employees for evidence of manipulation, people with knowledge of those probes have said.
Even without the investigations, foreign-exchange units at global banks are in upheaval amid pressure to cut costs and shift to electronic platforms. Credit Suisse Group AG is eliminating some foreign-exchange jobs as part of an effort to shrink the fixed-income division, people with knowledge of the matter have said.