Morgan Stanley's Wisniewski quits to join hedge fund

Morgan Stanley's veteran head of European foreign exchange and emerging markets trading has left to join BlueCrest Capital Management, becoming the latest senior Morgan Stanley trader to join a hedge fund this year.

Marcin Wiszniewski, who has worked at Morgan Stanley for 14 years, has joined the $18.3bn (€13.5bn) London hedge fund as a portfolio manager on its $500m BlueCrest Emerging Markets Fund. He will join on May 10.

Wisniewski ran the desk since July 2008 when previous co-heads Bart Turtelboom and Karim Abdel-Motall were hired by London hedge fund firm GLG Partners to help replace Greg Coffey, who had joined Moore Capital.

Wiszniewski has been replaced at Morgan Stanley by Chris Nicoll, who has rejoined the bank as co-head of foreign exchange and emerging markets trading in Europe, following a two-year stint at $14.6bn hedge fund firm Moore Capital. Nicoll left Morgan Stanley for Moore Capital in July 2008 when he was head of European spot foreign exchange trading.

His new fellow co-head is Andrew Millward, who has been promoted after coming onboard earlier this year from JPMorgan. Nicoll and Millward report to Steve Mettler, global head of foreign exchange and emerging markets, and Rob Rooney, global head of interest rate, currency and credit.

Wiszniewski is the fourth senior trader to leave Morgan Stanley for a hedge fund this year, as remuneration and propietary trading comes under regulatory scrutiny, and some individuals seek the relative autonomy of a hedge fund compared to a large bank.

Eric Cole, who ran Morgan Stanley’s distressed sales, trading and research operation, is moving to Appaloosa Management, David Tepper's New Jersey firm that netted $7bn in 2009 for betting on battered financial shares. Morgan Stanley mortgage trader Ahsim Khan is set to join Brevan Howard, Europe's largest hedge fund firm, next month. He followed Morgan Stanley propietary trader Geoffroy Houlot, who joined the $30bn London firm in January.

BlueCrest has meanwhile seen assets grow almost 10% this year to $18.3bn on March 1 from $16.75bn at the end of 2009. It has benefited from inflows as investors put money back to work with established, blue-chip firms.

BlueCrest's largest fund, the systematic BlueTrend fund, which uses computer-driven models and manages over $9bn, returned 43% in 2008, when many of its peers took bad knocks to performance during the financial crisis, and was again up 4.3% last year, investors said.

Nicoll, Moore Capital and Brevan Howard declined to comment. BlueCrest confirmed the hire and declined to comment further. Morgan Stanley confirmed the appointments and declined to comment further.

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Financier Is Pulled Back Into Focus

Louis Moore Bacon, 53-year-old founder of Moore Capital, is among the most successful hedge-fund managers in history, and he has the 435-acre island to prove it.

The secretive hedge-fund manager's vehicle, Moore Capital, is in the news because it has placed one of its employees, London-based execution trader Julian Rifat, on administrative leave after Mr. Rifat's arrest for alleged insider trading. Moore said in a statement that it is cooperating with the investigation, and that it understands from the U.K. Financial Services Authority, which made the allegations, that the Rifat investigation doesn't involve any funds managed by Moore.

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Moore hedge-fund manager Louis Bacon and his wife, Gabrielle Sacconaghi, in London in 2007. A trader for a firm he founded has been ensnared in an insider-trading case, though no Moore funds are said to be involved.

Mr. Rifat couldn't immediately be reached for comment.

No hedge-fund manager came to represent the new Gilded Age as much as Mr. Bacon.

Using a "discretionary" trading style that favors intuition over numbers, he developed one of the world's great hedge-fund fortunes.

He has since recorded the largest personal property purchase in U.S. history and is known for stalking prey and for a fondness for polo and other sports.

Mr. Bacon started his financial career trading futures for Shearson Lehman Brothers.

He founded Moore in 1989 and has long been associated with some of the founders of the modern hedge-fund industry. His stepmother is the sister of Tiger Management founder Julian Robertson, who has since closed his hedge fund.

Like many hedge-fund managers, Mr. Bacon rarely speaks to the press and wouldn't comment for this article.

Mr. Bacon is one of 29 hedge-fund managers on Forbes's 2009 list of the 400 richest Americans; his wealth was placed by the magazine at $1.5 billion.

Moore now manages more than $14 billion in several hedge-fund strategies.

He is best-known for "global macro" investing, which is a style that allows wide flexibility in investments and often is driven by big-picture strategy rather than specific security selection. Mr. Bacon's $7.2 billion flagship Moore Global Investment Fund was slightly down in 2010 through Feb. 25, but has posted annualized returns of 21% since its inception in 1990.

When Mr. Bacon started Moore, most investors in his funds were wealthy individuals. Much of Moore's investor money during the past few years has come from institutions, according to people familiar with the firm.

Mr. Bacon has bought some notable properties. In addition to the 435-acre island he owns off the Long Island Sound, Mr. Bacon in 2007 bought the Forbes family's Colorado ranch for $175 million, thought to be the highest-priced U.S. residential property purchase ever in the U.S.

It is one of several properties he owns.

Some of Mr. Bacon's more notable non-portfolio expenditures include paying the rock band the Pretenders to play at his 50th birthday party and buying English polo player Jack Kidd's polo farm.

A Middlebury College graduate with an MBA from Columbia, Mr. Bacon married Gabrielle Sacconaghi, then 39, in 2007. He was married once before, and divorced.

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Check Out Moore Capital's Top Ten Holdings

We think it's unlikely that investors will end up redeeming their cash from Moore Capital after today's insider trading arrest.

Based on first blush, this doesn't look to be Raj, so there won't be great opportunities for shorts to play the liquidation.

Still this gives us a good chance to examine Louis Bacon's investing profile.

Here are the fund's last reported top-10 holdings, according toStockpickr. Notice they're super-heavy on financials.

They are:

• Bank of America (BAC, 29.31% of portfolio)
• Standard and Poors (SPY, 5.48% of portfolio)
• Mastercard (MA, 5.05% of portfolio)
• IShares Trust (EEM, 4.79% of portfolio)
• CME Group (CME, 3.95% of portfolio)
• Assured Guarantee (AGO, 3.84% of portfolio)
• Max Capital Group (MXGL, 2.95% of portfolio)
• Banco Santander (BSDR, 2.61% of portfolio)
• Citigroup (C)
• Wells Fargo (WFC)

Moore Cap has just said that no client funds were involved in the possibly illegal trades, so again the possibility of a liquidation is unlikely.

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Asia Day Ahead: Moore, Deutsche Bank Workers Probed (Update1)

March 24 (Bloomberg) -- The following are the top Asia stories for the day.

TOP STORIES/MOST READ ON BLOOMBERG

Moore, Deutsche Bank Workers Probed on Insider Trades (Update1)

An employee of hedge-fund Moore Capital Management LLC’s U.K. unit was arrested and workers at Deutsche Bank AG and Exane SA are being investigated in the U.K’s largest crackdown on insider trading.

Credit Suisse Making Sales Hires for Investment Bank (Update2)

Credit Suisse Group AG, Switzerland’s biggest bank by market value, plans to hire more than 130 sales people at its investment bank this year.

Germany, France Back IMF Aid to Greece, Official Says (Update1)

Germany and France have agreed to back International Monetary Fund aid for Greece, a German Finance Ministry official said, signaling a joint position after weeks of dispute over how to resolve the Greek crisis.

Julian Rifat Said to Be Moore Trader Served by FSA (Update1)

Julian Rifat, an equity-execution trader at Moore Capital Management LLC, was served with a search warrant by the U.K.’s Financial Services Authority, according to a person with knowledge of the matter.

MAIN ECONOMIC RELEASES: Figures are based on Bloomberg survey of economists:

New Zealand Trade Deficit Seen Widening to 1.6 Billion in 4Q Japan’s Exports Seen Quickening to 45.7% in February

MAIN ANALYST UPGRADES/DOWNGRADES: *Transfield Services Rated New ‘Neutral’ at Credit Suisse *Reject Shop Cut to ‘Neutral’ at Credit Suisse *AGL Energy Cut to ‘Neutral’ at Credit Suisse *LG Household Cut to ‘Neutral’ at HSBC *SK Broadband Co Ltd Raised to ‘Neutral’ at HSBC *Baidu Inc Cut to ‘Hold’ at Mirae Asset Securities *Asia Cement China Holding Cut to ‘Inline’ at SinoPac *ICICI Bank Cut to ‘Hold’ at BNP Paribas Securities (Asia)

ASIAN MARKETS

The Nikkei 225 futures contract due in June fell 45 to 10,700. The Hang Seng Index futures contract for March rose 145 to 21,020. The S&P/ASX 200 Index futures contract due in June rose 42 to 4,896 at 6:59 a.m. in Sydney.

U.S. Stocks Advance to Send S&P 500 Index to 18-Month High

U.S. stocks advanced, sending the Standard & Poor’s 500 Index to an 18-month high, as signs of growing demand for steel and semiconductors boosted confidence the economic recovery is strengthening.

Leveraged Buyout Revival Seen in Default Swaps: Credit Markets

Credit-default swaps tied to the bonds of borrowers from Computer Sciences Corp. to Lubrizol Corp. are rising on speculation that leveraged buyouts will accelerate, saddling takeover targets with added debt.

Euro Declines as France, Germany Support IMF Role in Greece Aid

The euro fell versus most major counterparts after an official said French and German leaders agreed the International Monetary Fund should be involved in any aid package for Greece, damping demand for the common currency.

European Stocks Climb to 18-Month High; Legal & General Gains

European stocks rose to an 18-month high as Germany and France agreed to back International Monetary Fund aid for Greece and Legal & General Group Plc reported earnings that topped analysts’ estimates.

Bund Futures Outlook Is ‘Bullish,’ UBS Says: Technical Analysis

The June bund futures contract may rise as high as 124.20 should it overcome resistance at yesterday’s peak of 123.69, UBS AG said, citing technical indicators.

Crude Oil Falls on Dollar Gain, Forecast for Supply Increase

Crude oil fell as the dollar climbed against the euro and analysts forecast that a government report will show a gain in U.S. stockpiles.

Gold Rises After Two-Day Slump, Dollar’s Decline Spurs Buying

Gold rebounded, snapping a two-day decline, as the dollar declined and prices near a one-month low attracted buyers.

HIGHLIGHTS FROM NEWSPAPERS:

BHP, Rio Iron Venture May be Delayed to 2011, Australian Says

BHP Billiton Ltd.’s proposed iron ore venture with Rio Tinto Group may not be implemented until 2011 with regulatory approval potentially still “several months” away, the Australian newspaper reported, citing Rio executive Sam Walsh. European Union approvals may not be completed until the second half of 2010 which would delay implementing the plan, the newspaper said.

--Editor: Tim Smith

To contact the editor responsible for this story: Tim Smith in Sydney at tsmith58@bloomberg.net

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Insider Case Snares Moore Capital

Trader at London office of hedge fund among those arrested in what authorities describe as a massive insider-trading scheme.

Moore Capital founder Louis Moore Bacon

Hedge funds like to brag that they didn't engage in the risky activities that landed big Wall Street banks at the center of the financial crisis, but regulators are beginning to paint a different picture.

While the banks were packaging and unloading deadweight mortgage securities and other products on each other and unsuspecting clients (so the criticism goes), some traders at hedge funds were engaged in questionable trading, according to regulators.

Moore Capital is the latest major hedge fund to be associated with allegations of insider trading. British regulators raided the $14 billion hedge fund's London offices Tuesday and arrested one of its traders, along with a worker atDeutsche Bank ( DB - news -people ) and four others around the City, in what they are calling a massive insider trading scheme.

In a statement Moore Capital said the investigation doesn't involve any of its funds. The trader, who worked on the equity execution desk, was put on administrative leave and Moore says it's cooperating.

Deutsche Bank also said in a statement "we are cooperating with authorities as they look into this matter."

Moore Capital was founded by reclusive billionaire Louis Moore Bacon in the 1980s and had success recently. Its main fund was up 22% last year. It has been recruiting traders from big firms like Goldman Sachs ( GS - news - people ) andCitigroup ( C - news - people ). In February it signed up former top Citi executive Michael Carpenter.

Regulators on both sides of the Atlantic, stung by accusations they fell down on the job during the bubble years, have been eager to prove they are cleaning up the markets, and hedge funds have been big targets.

Tuesday's case involved nearly 150 investigators and raids on 16 offices in an unprecedented joint effort by the Financial Services Authority and the Serious Organised Crime Agency. The probe started more than two years ago.

It comes six months after U.S. regulators targeted Galleon Group, and its founder, billionaire Raj Rajaratnam. Galleon traders have been accused, along with more than a dozen others, of insider trading in stocks like Advanced Micro Devices. Galleon, once with $3 billion of assets, shut down shortly after the October 2009 arrest of Rajaratnam, who is maintaining his innocence.

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