Ian Kerr, Personal View: The renaissance of proprietary trading.

Financial News, March, 2003

Byline: Ian Kerr

It was already the worst-kept secret on Wall Street and in the City of London but some mischief-maker has spilled the beans. Proprietary trading is back. Almost everyone is hard at it and, as a London-based hedge fund manager quipped: "The last house into the prop deep plunge bath is a sissy."Are hedge funds the main cause behind the renaissance of proprietary trading among the investment banks? Well, yes and no. Yes, because almost by definition they are constant traders for their funds which, because of the sky-high performance fees and the vested interests of the principals, are often managed like personal accounts.

Yes, because with the reduced activity of shell-shocked insurance companies and other traditional buyside...

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