Goldman Prop Traders Find a Home at KKR

KKR is in talks to hire nine members of Goldman Sachs’s famed proprietary trading desk to form a new hedge fund.

Bob Howard would join as an MD and report to William Sonneborn, who heads KKR’s asset management division, Bloomberg said. Howard headed the Goldman Sachs group in the U.S. The hedge fund is expected to start raising money next year, Bloomberg said.

The move means the unwinding of the Goldman business, which gave rise to many Wall Street luminaries, including Robert Rubin, the New York Times Dealbook said. KKR has been trying to expand beyond PE and catch up to its main rival, the Blackstone Group, which already has four distinct operations (buyouts, real estate investing, hedge funds and advisory services), Dealbook said.

KKR beat out Perella Weinberg Partners and Avenue Capital Group to hire the Goldman desk. The nine-person team officially joins KKR on Jan. 1, Fortune says.

Goldman is disbanding the business to comply with the Dodds-Frank Act, which limits bank involvement in riskier investments. Other firms are expected to announce plans for their prop trading desks. Last month, JP Morgan moved its prop trading desk into asset management to comply with the rules.