Boaz
Weinstein, co-head of global credit trading at Deutsche Bank AG, is
leaving the tumultuous credit arena to enter the tattered hedge fund
universe. Weinstein, who with co-head Colin Fan has steered Deutsche's
credit trading for the past decade and was one of the pioneers of
credit default swap trading, will call it quits in the second quarter
of this year to start up his own hedge fund, said a London-based
Deutsche spokesman, according to Friday media reports.
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Weinstein is
not going at it alone as he will steal away 15 Deutsche colleagues to
launch the fund. Fan will stay on board as sole head of global credit
trading. A Deutsche spokeswoman did not return calls.
Weinstein,
who celebrates an accomplished career at the German bank, was not
immune to the massive credit market dislocation over the past year.
Deutsche lost roughly $1.2 billion in its Credit Proprietary Trading
unit in the third quarter ended Sept. 30.
Boaz leaves the credit
desk to step into a hedge fund industry fraught with redemptions as
investors desperately seek to fulfill liquidity needs. In terms of
performance, hedge funds closed the year down 18.30%, the worst year on
record, according to Hedge Fund Research Inc.
However, hedge funds
that have the capital wherewithal to do so or proven managers that have
been able to attract capital are expanding in the distressed debt space
in order to capitalize on bargain basement opportunities. John
Paulson's Paulson & Co. fund is reportedly looking at areas such as
distressed debt, distressed mortgages and mortgage restructurings, and
Nelson Peltz's hedge fund Trian Fund Management LP in December hired
two former Drexel bankers, Jay Bloom and Dean Kehler, to help grow its
presence in the credit market.
While the focus of Boaz's
soon-to-launch fund is unclear, it would not be a surprise if the
credit guru decided to dabble in distressed debt too. - Michael Rudnick
