Merrill's Goldsmith Quits for Khosla's Hedge Fund, People Say
By Bradley Keoun
Feb. 12 (Bloomberg) -- Merrill Lynch & Co.'s Graham Goldsmith, head of a team of traders and bankers who invest in distressed company debt, is leaving to join Strategic Value Partners LLC, the hedge fund run by former colleague Victor Khosla, three people familiar with the situation said.
Goldsmith, 40, made the decision to give up his post as head of corporate principal investments, and Merrill executives tried to keep him, said the people, who declined to be identified because the firm hasn't announced his departure. He has worked at the New York-based securities firm since July 1994, according to regulatory records. His group's investments included loans and bonds of financially weakened companies.
The departure reduces Merrill's senior trading ranks just as Chief Executive Officer John Thain is trying to bolster them. Thain, appointed last year after the ouster of Stan O'Neal, said in November that Merrill's trading business needed to ``add some senior management talent.'' In December, the firm hired Jeff Kronthal, a onetime bond-trading executive who was fired by previous management 17 months earlier, as a consultant.
Goldsmith didn't return phone calls seeking comment. Jonathan Gasthalter, a spokesman for Greenwich, Connecticut- based Strategic Value who works for Sard Verbinnen & Co., declined to comment, as did Merrill spokeswoman Jessica Oppenheim.
Khosla, who founded Strategic Value Partners in 2001, was a managing director at Merrill Lynch from 1993 to 1998, where he built and oversaw a trading desk that invested in distressed debt, according to a biography on the Web site of the Arab Bankers Association of North America. Greenwich, Connecticut- based Strategic Value now has about $5 billion under management.
Merrill is a passive, minority investor in Bloomberg LP, the parent of Bloomberg News.
To contact the reporters on this story: Bradley Keoun in New York at bkeoun@bloomberg.net .
Last Updated: February 12, 2008 15:25 EST
