Citigroup’s Sutesh Sharma may quit to begin his own hedge fund

Sutesh Sharma, who heads a team of Citigroup Inc proprietary traders, intends to leave the company and start a hedge fund, two people familiar with the plan said.

Sharma, 48, has held discussions with potential investors about raising money for his own firm, said the people, who asked not to be identified because the information is private. Sharma, who’s based in London and leads the bank’s Principal Strategies unit, may be joined at the fund by members of his team, two people briefed on the moves said.

Citigroup executives have been discussing what to do with the company’s proprietary traders since last year, when the US Congress approved legislation that restricts banks from using their own money to wager on securities and markets. The change, which hasn’t yet taken effect, was advocated by Paul Volcker. The former Federal Reserve chairman said banks backed by US deposit insurance shouldn’t be allowed to speculate. Sharma’s team manages about $2 billion, one of the people said.


“Even though the rule itself doesn’t go into effect for at least another year, you’d be crazy not to start thinking about moving elsewhere,” said Charles Whitehead, an associate professor of law at Cornell Law School in Ithaca, New York.

Citigroup Chief Executive Officer Vikram Pandit, 54, met with Sharma this month to discuss his plans, one person said. The New York-based bank was considering moving Sharma and his team to a division that manages money mostly for outside investors. Sharma decided he’d rather run his own multi-strategy hedge fund, a choice the bank supports, one of the people said. The fund would be started next year.

Source: Business Standard

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