Wall Street Traders
Wall Street Traders Leaving Banks for Hedge Funds
Blackstone Group, which long has backed hedge funds through its fund-of-funds business, is now raising a second, bigger "seeder" fund so it can dole out more money to proprietary traders and other investment pros spinning out of Wall Street to start hedge funds, say people close to the matter.
Seeding platforms typically give managers capital to trade—often $100 million to $250 million to start—and in exchange take a share of profits. The new Blackstone fund, which is still pulling in money, is expected to close with more than $2 billion, the people say.
Citadel Investment Group, the Chicago hedge-fund firm, has attracted more than a dozen portfolio managers to its second seeding platform for equities managers, called Surveyor, launched this year. Managers who recently joined the firm include Daniel Chai, who previously traded health-care stocks for UBS AG, people familiar with the firm say. Citadel's Pioneer Path seeding program, started in 2008, also has grown. Source