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Goldman Sachs Distressed-Debt Head Keefe Leaves for CarVal

March 31st, 20156:36 pm @

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(Bloomberg) — Jerry Keefe, a co-head of the distressed-debt trading group at Goldman Sachs Group Inc., left the bank
for hedge fund CarVal Investors LLC.

Keefe will join CarVal’s distressed debt group this summer,
according to Ann Folkman, a spokeswoman at the Hopkins,
Minnesota-based company. Keefe, 46, was co-head of Goldman
Sachs’s distressed group along with Tom Tormey and Dennis
Lafferty. Ivelina Markova in Europe, is also leaving the bank
for London-based hedge fund CQS, according to people familiar
with the matter.

Keefe’s exit adds to recent defections from the bank’s
distressed-debt group, including Ned Oakley and another trader
from the team in New York, people familiar with the moves said
earlier this month. The group is said to have sustained losses
last year on bets made on casino operator Caesars Entertainment
Corp., which pushed its largest operating unit into bankruptcy
in January.

Tiffany Galvin, a spokeswoman at Goldman Sachs, declined to
comment. Keefe also declined to comment. Markova didn’t respond
to a message left on her mobile phone. Michael Rummel, a
spokesman for CQS in London, declined to comment on Markova’s
hiring.

Tormey, one of the heads of the group, was elevated to the
position of partner in November, while both Keefe and Lafferty
are managing directors.

Keefe will be working closely with Chief Investment Officer
John Brice at CarVal, according to Folkman. CarVal, which
manages more than $10 billion in assets, is the credit-investment unit of commodities trader Cargill Inc.

CarVal Group

Keefe will join Lucas Detor and David Chene in the
distressed trading group. Detor co-headed distressed-debt
trading at Morgan Stanley before joining the fund in 2013 and
Chene previously had a similar role in Europe with Credit Suisse
Group AG.

Goldman’s credit trading revenue dropped to fifth or sixth
among the world’s largest investment banks last year, down from
a tie for second in 2013, according to data from industry
analytics firm Coalition Ltd.

The firm’s distressed unit was profitable for 2014 even
with the Caesars loss, a person briefed on the results said
earlier this month. Still, the credit trading unit had other
hits to its performance.

Shipping Losses

Goldman joined other shipping financiers in suffering
losses during a year when the Baltic Dry Index, a measure of
commodity shipping costs, fell 66 percent. The credit unit also
had a writedown of a loan to Banco Espirito Santo, which the
Bank of Portugal chose not to transfer to the new bank that
emerged from the rescue of the Lisbon-based lender. Goldman
Sachs has said it may challenge that decision.

Credit trading produced 25 percent of about $50 billion in
fixed-income trading revenue at the bank over the past five
years, according to a presentation on its website. JPMorgan
Chase Co. generates the most fixed-income revenue globally,
according to data from Greenwich Associates.

Other senior departures from Goldman Sachs recently include
Jeff Psaki, a junk-bond trader, and Jim Joyce, a leveraged-finance salesman. Josh Rubinson, another managing director, left
for bond-trading platform TruMid Financial LLC.

To contact the reporters on this story:
Sridhar Natarajan in New York at
snatarajan15@bloomberg.net;
Lisa Abramowicz in New York at
labramowicz@bloomberg.net;
Michael J. Moore in New York at
mmoore55@bloomberg.net

To contact the editors responsible for this story:
Shannon D. Harrington at
sharrington6@bloomberg.net
Faris Khan, Michael Aneiro



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