Bloomberg- Dow Kim, the second-highest-paid executive at Merrill Lynch & Co., is resigning to form a hedge fund, the latest top manager to leave an investment bank for the higher pay of running an independent trading firm.
Kim, 44, is stepping down after 13 years at New York-based Merrill Lynch, the third-biggest U.S. securities firm. A former currency derivatives trader, he has led Merrill’s sales and trading unit since 2003, a period when trading revenue more than doubled.
While Kim’s $37 million pay package last year was second at Merrill only to Chief Executive Officer Stanley O’Neal’s, hedge- fund managers can earn as much as $1 billion, according to Institutional Investor’s Alpha magazine. Goldman Sachs Group Inc. has lost partners including Hyder Ahmad and Eric Mindich to new hedge funds in the past three years. Bank of America Corp. said earlier this month Chief Investment Officer Ian Banwell would leave to open a fund.
“Dow can make 10 times what he’s making now if he goes out on his own,” said Gary Goldstein, Chairman and CEO of Whitney Group, an executive-recruitment firm in New York. “This is probably a good time to do it.”
Gregory Fleming, 44, who was co-head of trading and investment banking with Kim, will become co-president of Merrill with Ahmass Fakahany, 48, who was chief administrative officer. Kim’s departure makes Merrill the only major U.S. securities firm without a trading veteran in its highest ranks at a time when that business provides almost half of Merrill’s revenue.
