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JPMorgan's Staley Joins BlueMountain

Tuesday, 8 Jan 2013 | 8:12 AM ET
JPMorgan's Staley Joins BlueMountain
CNBC's Kate Kelly reports former JPM investment banking chief, James Staley is joining BlueMountain Capital Management and will also purchase a stake in the hedge fund.

Former JPMorgan Chase investment-banking chief James "Jes" Staley is joining BlueMountain Capital, the $12 billion hedge fund, as a managing partner.

Staley, who ran the bank's sprawling underwriting and trading division until last August, has deep roots in the money-management business, among other things having overseen JPMorgan Asset Management until 2009. In his new role, he will help spearhead the expected growth of BlueMountain, which people close to the firm say is building on a standout year to add clients and assets.

(Read More: Hedge Funds Rail on Markets, Regulators)

BlueMountain's flagship fund was up more than 10 percent for 2012, based partly on the profits it took taking the other side of JPMorgan's now-infamous "London Whale" trade, a bet on certain illiquid corporate credits. That trade lost JPMorgan at least $6 billion, but made BlueMountain hundreds of millions, according to someone familiar with the matter. The exact amount was not disclosed.

(Read More: London Whale Trades Led to Big Profits for BlueMountain)

BlueMountain has JPMorgan links beyond the Whale trade. Its chief executive, Andrew Feldstein, worked at the bank until 2003, when he left his post running structured credit to start the hedge fund.

(Read More: BlueMountain: We Swam With 'London Whale')

—By CNBC's Kate Kelly; Follow her on Twitter: @KateKellyCNBC

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