Goldman Sachs to close Global Macro proprietary trading

Goldman closes the trading units to comply with the Volcker rule, a provision of the Dodd-Frank financial law that prohibits banks from betting capital for their own accounts.

Out of the eight trader of the desk, some might leave the company. Karl Devine, who headed a team of four people in London and other traders are in talks with london-based hedge fund, including Brevan Howard, said a source familiar with the matter.

What will become New York based traders is not clear.

Goldman has ran its Global Macro Proprietary Trading for decades. Even though it was smaller and less important than the Principal Strategies desk, Global Macro Proprietary Trading was a carreer booster for several well-known hedge fund managers

Driss Ben-Brahim, who headed the desk before joining london based GLG Partners hedge fund in 2008, was considered as one of the highest paid Goldman’s employee in Europe.

Goldman Sachs last august shut down Goldman Sachs Principal Strategies to comply with the Volcker rule. According to analysts, the desk’s assets under management were about 1 to $2 billions

How many prop trading desks does Goldman have? It is not easy to answer as one needs to take into account the way lawmakers and regulators define proprietary trading.

However, Goldman still runs a larger proprietary trading unit called Special Situations Group. Goldman Sachs said it had no intention of closing the desk because it believes that this unit complies with the Volcker rule, as it is used primarily to make loans to businesses and invest in debt securities with a long-term horizon.

Analysts estimate that the Special Situations Group desk manages at least $ 10 billion of assets under management, and sometimes contributes substantially to the overall result of the bank.