July 8 (Bloomberg) -- Scott Balkan, head of distressed debt at Citigroup Inc., is leaving to join hedge fund Silver Point Capital LP, two people with knowledge of the matter said.
Balkan will join Greenwich, Connecticut-based Silver Point as a trader, according to one of the people, who asked to remain anonymous because they weren’t authorized to publicly discuss the move. He didn’t respond to an e-mail asking when he would start the new job.
Citigroup has been losing traders this year to hedge funds, the destination for those on Wall Street who want to make the biggest bets and earn the most money. Banks face an industrywide slowdown in bond trading and new regulations limiting risk.
Balkan assumed his role at Citigroup more than two years ago after a shakeup in the division led to the departure of two senior traders, people familiar with the matter said in January 2012. He had previously run investment-grade bond trading.
Michael Pringle, Citigroup’s London-based global head of equities trading, left the bank in May for Moore Capital Management LP. Simon Yates, head of equity derivatives, later joined Two Sigma Investments LLC and Jeff Feig, global head of foreign exchange, took a job with Fortress Investment Group LLC.
Earlier this year, Citigroup lost four debt traders including David Cohen, who took over investment-grade bond trading when Balkan switched to distressed debt in the shakeup, people familiar with the departures said at the time.
Citigroup Chief Financial Officer John Gerspach, 60, has warned that the slowdown in trading may continue. He said in May that second-quarter trading revenue could decline as much as 25 percent from year-earlier levels in a market he described as “becalmed.”
Silver Point was founded in 2002 by former Goldman Sachs Group Inc. bankers Edward Mule and Robert O’Shea. Its main fund returned 18.3 percent last year, according to a person familiar with the performance. Silver Point managed about $8.7 billion at the end of 2013, a regulatory filing shows.