A risk manager is setting up his own hedge fund; this is not normal

Gregg Weinstein, a former Goldman Sachs partner who had held the title since 2002, is setting up his own hedge fund, according to eFinancialCareers. Most recently he served as global head of risk management for Goldman Sachs Asset Management. The move is unusual because hedge fund founders have typically come from trading, sales, or analyst backgrounds rather than risk management.

John Godden, CEO and founder of hedge fund consultancy IGS Group, described the move as "properly weird and spooky," noting that most hedge fund founders have "almost the opposite profile to a risk manager." A hedge fund risk manager who later moved into banking prop trading was quoted saying that being a good risk manager does not qualify someone to be a good risk taker. Weinstein's background is less unusual than it first appears: he was once head of US credit trading at Goldman, giving him direct trading experience.

Weinstein is not the only risk manager to move toward portfolio management. Jean-Felix Aniel-Quiroga, a partner at Brevan Howard, is rumoured to have made the same transition. London hedge funds are reportedly placing greater emphasis on risk management, and Marshall Wace is rumoured to have appointed a well-known risk manager who is due to start in a few months.

A headhunter cited Bluecrest and Brevan Howard as firms people want to emulate, noting both were known for strong risk management and performed well during the downturn. Barry Seath of Mirage Recruitment said that all hedge funds are strengthening compliance and risk teams as they pursue institutional money, a trend that may give Weinstein's new fund an advantage.