Bloomberg – Boris Ehsani, head of one of Merrill Lynch & Co.’s most profitable trading groups, is leaving the U.S. securities firm after it canceled a plan to spin off his unit as an independent hedge fund, people familiar with the matter said.
Ehsani, a 23-year Merrill veteran, said he now plans to start his own hedge fund with backing from other investors. His unit, the Principal Credit Group, has a staff of more than 30 people, oversees $2.8 billion and produced $461 million of total revenue last year, according to sales materials prepared for the planned fund in March.
Merrill Chief Executive Officer John Thain is ratcheting back the firm’s investments in hedge funds, private companies and real estate to reduce risk and free up capital. Merrill had developed the plan for Ehsani’s fund for more than two years, at one point agreeing to seed it with at least $500 million, according to people with knowledge of the matter who declined to be identified because the plans weren’t made public.
“At some point in time, you need to move on and do your own thing,” Ehsani, 48, said in a brief interview. “We’ve been working on this model for a long time, and this is just the right time to do it.” He declined to comment further.
Mark Devonshire, 46, Ehsani’s top deputy, who oversees the Principal Credit Group’s operations in Hong Kong and London, said he also is leaving and may join Ehsani.
