Citi. Prop. Chief Readies US$500M Hedge Fund

Jun 18 2012 | 11:58am ET

Citigroup’s former proprietary trading chief will launch his hedge fund in the fall with some US$500 million.

Sutesh Sharma set up Portman Square Capital in London last year. The multi-strategy relative value fund is expected to be among the largest hedge fund launches of the year.

Sharma, a former portfolio manager at Old Lane Partners, the hedge fund founded by Citi CEO Vikram Pandit, began making plans to start a hedge fund last year, as Citi prepared to shut its prop. trading operations in response to new U.S. banking regulations. Citi closed Sharma’s Equity Principal Strategies desk in February.

The bank will not invest in Sharma’s new endeavor, but Sharma and his Citi veteran-heavy team have left the bank on amicable terms, the Financial Times reports. The new fund will operate out of Equity Principal Strategies’ former London offices in Marylebone, which also formerly housed Old Lane’s European office.

Sharma has hired about 11 people to work with him at Portman Square, including two other former Old Lane managers, Lalit Das and Yusaf Khan. The new firm also boasts alumni of Brevan Howard Asset Management, Citadel Investment Group and Moore Capital Management, among them event-driven, convertible bond and volatility traders.

While Sharma expects to launch with US$500 million, he likely could have raised more: The FT reports that Portman Square is being careful about its initial size, and Sharma managed some US$2 billion at Citi.

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