Giacomo Draghi Said to Exit Morgan Stanley for Hedge Fund

Interest-rate swaps trader Giacomo Draghi has left Morgan Stanley in London and is joining hedge fund LMR Partners, according to people familiar with the matter.

The son of European Central Bank President Mario Draghi spent about 13 years at the U.S. bank, according to the U.K.’s Financial Conduct Authority register. He will join LMR later this year, according to the people, who asked not to be identified because they’re not authorized to talk about it. Draghi traded derivatives denominated in currencies including euros and Swiss francs at Morgan Stanley, according to his LinkedIn profile.

London-based spokesmen for Morgan Stanley and LMR declined to comment. Giacomo Draghi didn’t respond to a LinkedIn message asking for comment on his move.

LMR is a $2.5 billion hedge fund based in London and Hong Kong, whose founders include former UBS Group AG traders Ben Levine and Stefan Renold. Almost half of its assets under management are in its Alpha Rates Trading Fund, which seeks “to exploit relative value opportunities in the interest-rate space” and gained about 16 percent last year, according to an investor letter seen by Bloomberg.

Macro hedge funds returned an average of about 1 percent in 2016, according to data from Hedge Fund Research Inc. Other outperformers include Chris Rokos’s fund, which also bets on economic trends and rose about 20 percent last year, and Element Capital Management’s hedge fund, which gained about 19 percent in the same period, said people familiar with the matter last month.

Mario Draghi, who became ECB president in 2011, has slashed interest rates and executed a 2.3 trillion-euro ($2.4 trillion) quantitative-easing program to boost inflation and economic growth in the euro zone. In July, he told reporters at a press conference that his son’s job didn’t pose a conflict of interest.

— With assistance by Donal Griffin, Saijel Kishan, Bei Hu, and Alastair Marsh

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