UBS star trader goes solo with launch of hedge fund

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The Independent Online

One of the City's most aggressive traders will soon be snapping even more ferociously at the heels of management as the head of a $5bn (£2.7bn) hedge fund.

In his new role, Jon Wood will be set free from potential client conflict at UBS, the Swiss investment bank where he heads proprietary trading. Backers have already committed $3bn to his SRM global fund, which will be capped at $5bn and launched on 1 September. UBS, where Mr Wood has worked for the past 17 years, is investing $500m.

Under Mr Wood, UBS's strategic risk management team has delivered an average annual return of more than 50 per cent over the past five years, earning $2.4bn in revenue for the bank.

The two other members of the team - Ian Barclay and Adrian Marsh - plus three support staff are also leaving UBS to start SRM. The hedge fund will be based in Monaco, and will be the first to be regulated in the principality.

Institutions or the very rich can invest in SRM, and can choose to commit funds for three or five years. Those locked in for three years will be charged 1.5 per cent of assets under management each year; longer-term investors will pay 0.5 per cent less. A quarter of all profits will go to SRM.

While at UBS, Mr Wood earned a reputation as a fierce and ruthless operator. As an activist shareholder, he headed a shareholder revolt at Lazard and pressured companies such as Fiat and Olivetti to change share structures to boost prices.

Mr Wood was thrust into the spotlight last year when he lost a £100m action in the High Court against Sir Tom Hunter and Chris Gorman, two of the country's best-known retail entrepreneurs. At the time, Mr Wood, who reputedly earns £20m a year from his job with UBS, was criticised by Mr Justice Warren as being an "unreliable witness", "evasive" and a "very hard and calculating man".

Mr Wood had sought compensation after claiming that Sir Tom and his business partners reneged on an agreement to buy the Birthdays greetings card shops through The Gadget Shop, a retailer co-owned with Mr Wood and his business partner, Peter Wilkinson. In fact, Sir Tom and his partners bought Birthdays for themselves.