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‘London Whale’ hedge fund hiring investment bankers quintuples profits, doubles pay

It’s been a good year to work at BlueMountain Capital Management in the UK – the $15.6bn hedge fund that profited by taking the other side of the ‘London Whale’ trade. Profits in 2012 has increased five-fold on the previous year, headcount has increased and pay has nearly doubled.

Until recently BlueMountain Capital Management was a $3bn hedge fund happy to largely sail under the radar, but it’s been making waves in the past 18 months. As well securing big gains by trading the illiquid CDX IG-9 corporate debt that eventually cost JPMorgan $6bn, it hired the banks’ former head CEO of investment banking, Jes Staley, earlier this year.

BlueMountain’s headquarters are in New York, but its London operation also did well last year, as accounts filed recently on Companies House reveal. It posted a profit of £21.6m for 2012, all of which was available for division among its three members, compared to £4.2m in 2011.

It’s also been hiring – 25 staff, predominantly portfolio managers and analysts, worked in its London office at the end of 2012, compared to 19 in 2011. It put aside £11.8m for compensation in 2012, or an average of £472k per head, compared to £6.5m the previous year, or an average payout of £342k.

BlueMountain has continued to add staff in 2013, and is one of the select number of hedge funds who target investment banks for talent. Most recently, it hired Rebecca Clements from Investec as an analyst in September, but it’s been recruiting from banks throughout this year.

David Williams, who was formerly director of European convertible bond trading at Bank of America Merrill Lynch joined in July as did Tom Eardley, who worked in the EU distressed debt and leveraged loan trading team at Barclays as a credit trader. Yunus Olcer, an analyst at Goldman Sachs, signed up to BlueMountain as a research analyst in June, as did Ed Sent, who was previously a partner at Owl Creek Asset Management and Chung Fu.

As well as Staley, BlueMountain’s senior management team is made up of a number of former bankers, including Andrew Felstein, its co-founder and CEO/CIO who was at JPMorgan for over ten years, and Andrew Gerstein, a managing partner and senior portfolio manager, who was a managing director at Goldman Sachs.

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