Key Takeaways
- • KKR hired a nine-person proprietary trading team from Goldman Sachs, led by Bob Howard, to establish a new long-short equity hedge fund, with the team joining in January 2017 after unwinding their Goldman trading business.
- • Bob Howard, who headed Principal Strategies for Goldman's U.S. business, will lead the new hedge fund initiative, marking KKR's entry into systematic stock trading operations.
- • The Goldman team transitioned from proprietary trading—making bets using Goldman's own capital—to launching a hedge fund under KKR's alternative investment platform.
- • This hire represents a strategic expansion of KKR's investment capabilities beyond its core private equity business into liquid equity markets and hedge fund management.
Summary
Kohlberg Kravis Roberts & Co. has recruited a nine-person proprietary trading team from Goldman Sachs to establish a new long-short equity hedge fund, according to Financial News London. The team, led by Bob Howard, is scheduled to join the private equity firm in January 2017 after completing the wind-down of their proprietary trading business at Goldman.
Bob Howard, who previously headed Principal Strategies for Goldman's U.S. business, will lead the initiative. The Goldman team previously conducted proprietary trading—making directional bets and trades using Goldman's own balance sheet capital—before transitioning to the new hedge fund structure at KKR.
The hiring represents a notable strategic shift for KKR, historically known for its private equity and buyout expertise. By bringing in an established trading team with institutional capital markets experience, KKR is expanding into liquid equity hedge fund management and systematic stock trading. The move signals the firm's intention to diversify its alternative investment offerings and leverage specialized trading talent from a tier-one investment bank.
The exact size of the initial fund or specific investment mandate details have not been disclosed, though the team's background in principal strategies and proprietary trading suggests a quantitative or systematic approach to long-short equity strategies. This hire underscores a broader trend among large alternative asset managers to develop multi-strategy capabilities and enter new asset classes to drive growth and client diversification.
Bob Howard, who previously headed Principal Strategies for Goldman's U.S. business, will lead the initiative. The Goldman team previously conducted proprietary trading—making directional bets and trades using Goldman's own balance sheet capital—before transitioning to the new hedge fund structure at KKR.
The hiring represents a notable strategic shift for KKR, historically known for its private equity and buyout expertise. By bringing in an established trading team with institutional capital markets experience, KKR is expanding into liquid equity hedge fund management and systematic stock trading. The move signals the firm's intention to diversify its alternative investment offerings and leverage specialized trading talent from a tier-one investment bank.
The exact size of the initial fund or specific investment mandate details have not been disclosed, though the team's background in principal strategies and proprietary trading suggests a quantitative or systematic approach to long-short equity strategies. This hire underscores a broader trend among large alternative asset managers to develop multi-strategy capabilities and enter new asset classes to drive growth and client diversification.
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