Former UBS trader launching distressed debt hedge fund

Tom Einhorn left the bank on 28 January, after spending about five years trading distressed securities at UBS.


Tom Einhorn, head of the event-driven trading group at UBS in New York, has left the Swiss bank to start his own distressed debt hedge fund, Bloomberg reported last week (28 January). Einhorn has been trading distressed securities at UBS since he joined in 2009. He worked at Goldman Sachs prior to that.

At UBS, his positions included investments in sovereign Greek debt, corporate bonds of Caesars Entertainment Corp., NII Capital Corp. and state-owned oil producer Petroleos de Venezuela SA, according to Bloomberg.

UBS had added new staffers to Einhorn's team in 2014 that included Nick Gustafson, Musaab Javed and Monica Ugidos. A spokeswoman for UBS declined to comment.

Many senior traders have been leaving banks over the past several years to start their own hedge fund or private equity firms or to join existing ones. Some of the reasons have included banks squeezing these divisions because of increased regulatory scrutiny, or the traders wanting to retain more of their own profits, especially as distressed investing is expected to become a lucrative play in the next few years.

Other recent examples of such departures have included Scott Balkan, previously the head of distressed debt at Citigroup, who left to join hedge fund Silver Point Capital as a trader in July 2014.

Matthew Barrett, previously the head distressed trader at Barclays, also left the bank to start his own distressed debt firm, Glendon Capital Management in Santa Monica in December 2013. That firm has already raked in as much as $1 billion for its debut fund, as PDI previously reported .

While Stephen Byrne, previously a managing director in the distressed debt trading team at Deutsche Bank left the group in September 2012. He later joined the hedge fund group of another bank: UBS O'Connor.

Further information about Einhorn's planned hedge fund couldn't be learned by press time and he couldn't be reached for comment.