Deutsche Bank’s Quantitative Team to Leave, Start Hedge Fund

[ASusilovic]

Deutsche Bank AG’s quantitative trading group is leaving to start a hedge fund as the Frankfurt- based bank scales back riskier businesses.

Equitech Group, the bank’s proprietary equity unit, is forming Roc Capital Management LP, which will be based in New York and run by Arvind Raghunathan, the bank’s head of global arbitrage, according to the fund’s marketing documents. Roc Capital will open in the second quarter with more than 20 people including traders and scientists globally.

“In this environment, it’s particularly important for individuals to have reputations in order to get access to seed money,” said Nicola Ralston, co-founder of London-based PiRho Investment Consulting Ltd., which advises clients on investing in hedge funds.

Josef Ackermann, chief executive officer of the Frankfurt- based bank, said on Feb. 5 he will cut risk by shifting resources from areas such as proprietary trading after “unprecedented market conditions revealed some weaknesses” in trading operations. He said the firm had reduced risk in proprietary trading by about 75 percent. Boaz Weinstein, 35, left the firm this year with about 15 colleagues to start a hedge fund after the proprietary credit desk he ran lost $1.3 billion in 2008.

Michele Allison, a New York-based spokeswoman for Deutsche Bank, declined to comment.

http://www.bloomberg.com/apps/news?pid=20601087&sid=agUcSLdvN1xQ&refer=home

Great news ! Another intraday liquidity provider !

 

[bidask]

do you know if he got any money since he already lost $1.3 billion?

 

[Landis82]

This transition for Deutsche Bank has been going on for years . . . Back in 1998, they bought out an equity derivatives trading desk from Nat-West Bank, that was essentially started by 4 guys from the equity derivatives program trading desk of Morgan Stanley and included a lot of option trading guys from O'Connor and Susquehanna.

Nat-West washed their hands of their equity derivative "venture" after about 18 months, and found a buyer in Deutsche Bank.

It was based in Greenwich, CT.
Had 125 employees, and was lead by Rick Goldsmith (sales) and Ralph Reynolds (trading).

The desk was extremely aggressive facilitating customer trade. But, it didn't take long for that venture to fall apart, either.

There is only so much time that you can quote markets and "facilitate" trade ( essentially making a market as a hedge-fund ) against customer order flow and still come into work in the morning with yet another derivative "hickey" on the books.