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KKR liquidates former Goldman Sachs traders-run hedge fund

Published on Jun 2, 2014 9:40 AM

NEW YORK (Reuters) - KKR & Co said on Sunday it had decided to terminate a hedge fund that invested in stocks which the private equity firm had launched in 2011 after poaching a team of proprietary traders from investment bank Goldman Sachs Group Inc.

The move shows some of the challenges that alternative asset managers still face in capitalising on the retrenchment of banks from some investment activities that regulators and lawmakers cracked down on in the aftermath of the 2008 financial crisis.

In 2010, KKR co-founders Henry Kravis and George Roberts had described the hiring of nine members of Goldman Sachs'proprietary trading group, led by Bob Howard, as an ideal fit with their objective of strengthening KKR's product offering.

The co-ordinated exodus of an entire team from Goldman Sachs remains to this day one of the most striking examples of the impact of the "Volcker rule," which limits the extent to which banks can bet on some investments with their own capital.

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