Deutsche Bank AG (DBK)’s Pablo Calderini, the head of equity proprietary trading, is leaving to join a hedge fund as Germany’s biggest bank winds down the business for buying and selling stocks with its own money.
Calderini, 46, has been with Deutsche Bank for about 14 years and helped establish the company’s emerging-markets business, according to an internal memo confirmed by spokesman Michael Golden. No replacement will be named for New York-based Calderini because the remaining equity proprietary unit will be folded into the regular equity flow business.
Anshu Jain, the head of Deutsche Bank’s corporate and investment bank, cut capital available for equity proprietary trading by 90 percent and closed the credit proprietary trading desk after the worst financial crisis since the Great Depression. The U.S. government is close to introducing the biggest rewrite of Wall Street rules since the 1930s including limits on potentially risky activities like proprietary trading.
“The switch to a hedge fund is logical because proprietary trading is being increasingly regulated at banks,” said Andreas Plaesier, a Hamburg-based financial analyst at M.M. Warburg. “Equity prop trading was relatively volatile at Deutsche Bank so it has turned the focus to flow trading.”
Jain, 47, reorganized the equities unit after losses in 2008 and the business posted the best result since 2007 in the first quarter of this year, helped by profitable equity proprietary trading. Deutsche Bank plans to spend about 1.6 billion euros ($2 billion) on hiring and technology for the global markets unit in the next two years to break into the top five in U.S. cash equities and commodities.
“Pablo has led the development of a number of cornerstone businesses in our sales and trading platform,” Jain said in the memo. “Most recently Pablo led our equity propriety trading business, including its successful transformation since the crisis to a highly liquid, less capital intensive strategy.”
Separately, Frankfurt-based Deutsche Bank said today it hired Dixit Joshi of Barclays Capital (BARC) as head of equities for Europe, the Middle East and Africa. The firm yesterday named Jeffrey Mayer, who previously worked at UBS AG (UBSN) and Bear Stearns, as head of global markets for North America.
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