Senior Bankers Moving Into Hedge Funds And Private Equity

Some very well known senior bankers are moving from their traditional roles into hedge funds and private equity. Lou Friedman, formally a senior dealmaker of Bear Stearns, has left his Wall Street bank and has joined the hedge fund, Peter Schoenfeld Asset Management.

A veteran of Wall Street, Friedman was vice-chairman of Bear’s investment banking division as well as bing chairman of their mergers and acquisitions unit. He will now become a part of PSAM, and will be a part of a new fund set up to focus on private equity deals and long-term investments.

Hedge funds and private equity groups are very pleased to have the opportunity to not only pick up senior bankers, but to give their companies the chance to dig in whilst other companies are struggling because of current market troubles.

Private equity group, Carlyle, has picked up Oliver Sarkozy this week, who was a senior banker for UBS and specialised in financial institutions.

These two are not the only ones to leave their traditional roles and move over to new hedge funds; such as Scott Kapnick, formally of Goldman Sachs and is now with Highbridge, and private equity groups; as with Jeff McDermott, formally co-head of UBS’s investment banking devision and is now with Stony Lane Partners and is focusing on distressed investments.

Currently, PSAM is focusing on merger arbitrage and distressed debt and are managing around $3bn in funds.

Long-term investment opportunities have opened up do to the current market instability, according to Peter Schoenfeld, and as a long term member on the international banking network, Lou is the perfect candidate to make use of this opportunity.

PSAM has been set up to have long-term investments which will allow the group to act in a similar capacity to that of a private equity group, however they will also be able to take stakes is public companies or debts across many industries.

Friedman plans on servicing a broad-range of industries as he wishes to work with those he has already set up successful business relationships with.

Bear hasn’t lost many senior bankers as yet since their distress last summer when two of their hedge funds collapsed due to heavy investments in the subprime securities market; Friedman will be among the first to leave.

Speculation is that Bear will invest in PSAM in the near future.

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