Morgan Stanley May Buy Stake in Hedge Fund Traxis founded by Barton Biggs

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ASusilovic

Morgan Stanley is considering buying a minority stake in Traxis Partners LLC, the hedge-fund firm founded by Barton Biggs and other former executives at the securities firm, according to a person with knowledge of the discussions.

Morgan Stanley may acquire less than 20 percent of Traxis, which manages more than $1.5 billion, said the person, who declined to be named because the talks haven't been made public. Morgan Stanley spokesman Mark Lake declined to comment. Biggs and other Traxis executives didn't respond to calls and e-mails seeking comment. Both firms are based in New York.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aXfn0Qh12tuY&refer=home

Seems investmentbanks want to stabilize their income generation for the next quarters... :p :p
 
No, no....not checked....just cooled down...:p :p :p


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Stabilize their income? More like they don't have the in-house expertise to trade profitably. If the hedge fund loses money, it's more palatable to blame the fund than to blame a company employee(s).
 
Quote from nazzdack:

Stabilize their income? More like they don't have the in-house expertise to trade profitably. If the hedge fund loses money, it's more palatable to blame the fund than to blame a company employee(s).
More...

Its natural for most i-banks to stake a minority stake in these firms as they are already doing business with them via providing prime brokerage services. Lehman did the same for DE Shaw a few months back. I don't see anything wrong here. With proper risk management this is basically a win-win for the I-banks as these hedge funds will generate huge amounts of revenue for their brokers.
 
You're right. Because of the incentive fee, the i-banks forgo some trading profits in exchange for commission dollars. They can also coat-tail the orders that they execute too!
 
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