Key Takeaways
- • Karl Devine, former head of Goldman Sachs's Global Macro Prop Trading desk in London, is joining Brevan Howard as a partner, bringing two colleagues (Brad Lord and Andrew Dausch) to the $24.7 billion flagship Brevan Howard Master Fund as global macro traders.
- • A fourth member of the Goldman unit, Chris Tuohy, is joining Tudor Investment Corp., indicating the team's dispersal across multiple hedge funds rather than consolidation at a single destination.
- • Goldman Sachs shuttered its Global Macro Prop Trading desk to comply with the Volcker Rule, which restricts proprietary trading by deposit-taking institutions; this closure represents the latest in a broader exodus of prop traders from the bank to external hedge funds.
- • The departing traders had negotiated with multiple hedge funds and declined Goldman's offer to relocate to its Geneva office, opting instead to remain in London, signaling stronger alignment with London-based alternatives.
- • Goldman and other banks continue to employ proprietary trading strategies through client-based units and identified loopholes in financial regulations, allowing the practice to persist despite formal compliance measures.
Summary
Three senior proprietary traders from Goldman Sachs's London-based Global Macro Prop Trading desk have joined Brevan Howard Asset Management, marking a significant talent migration as major banks unwind their prop-trading operations. Karl Devine, who managed the desk, will assume a partner role at Brevan Howard's flagship Master Fund, which manages $24.7 billion in assets. Brad Lord and Andrew Dausch, both members of Devine's team, will join the fund as global macro traders alongside Devine. A fourth team member, Chris Tuohy, has separately joined Tudor Investment Corp., indicating the unit's fragmentation across multiple hedge funds.
The movement stems directly from Goldman Sachs's decision to close its Global Macro Prop Trading desk in compliance with the Volcker Rule, regulatory restrictions on proprietary trading by deposit-taking financial institutions. The traders had been in active negotiations with several hedge funds and were offered relocation to Goldman's Geneva office, but chose to remain in London, reflecting stronger institutional preferences at London-focused hedge funds. This departure represents part of a broader trend of prop-trading talent leaving Goldman Sachs, following similar exits by Morgan Sze, former global head of principal strategies who launched a Hong Kong-based fund in December, and Pierre Henri Flamand, the former desk head who retired and established his own hedge fund.
Despite regulatory compliance measures, Goldman and other major banks have continued proprietary trading activity through restructured units, exploiting identified loopholes in the Volcker Rule by moving traders into client-based divisions and maintaining proprietary positions without violating explicit regulatory language. This structural adaptation underscores the durability of prop-trading economics at major financial institutions, even as formal dedicated prop-trading desks are dismantled. The Devine group's recruitment by Brevan Howard, a major global macro hedge fund, positions the traders within one of the industry's most prominent alternative asset managers and demonstrates continued institutional demand for experienced macro talent in the hedge fund sector.
The movement stems directly from Goldman Sachs's decision to close its Global Macro Prop Trading desk in compliance with the Volcker Rule, regulatory restrictions on proprietary trading by deposit-taking financial institutions. The traders had been in active negotiations with several hedge funds and were offered relocation to Goldman's Geneva office, but chose to remain in London, reflecting stronger institutional preferences at London-focused hedge funds. This departure represents part of a broader trend of prop-trading talent leaving Goldman Sachs, following similar exits by Morgan Sze, former global head of principal strategies who launched a Hong Kong-based fund in December, and Pierre Henri Flamand, the former desk head who retired and established his own hedge fund.
Despite regulatory compliance measures, Goldman and other major banks have continued proprietary trading activity through restructured units, exploiting identified loopholes in the Volcker Rule by moving traders into client-based divisions and maintaining proprietary positions without violating explicit regulatory language. This structural adaptation underscores the durability of prop-trading economics at major financial institutions, even as formal dedicated prop-trading desks are dismantled. The Devine group's recruitment by Brevan Howard, a major global macro hedge fund, positions the traders within one of the industry's most prominent alternative asset managers and demonstrates continued institutional demand for experienced macro talent in the hedge fund sector.
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