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Jeremy Stein, a former governor of the Federal Reserve.
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Another senior official from a policymaking body has signed up to be a paid advisor to a prominent hedge fund firm.

The latest to make the move is Jeremy Stein, a member of the Board of Governors of the Federal Reserve from 2012 to 2014. Stein will be a consultant to BlueMountain Capital Management, the $20.6 billion firm said in a statement Tuesday.

Stein, who remains a professor of economics at Harvard University, will advise BlueMountain on the investing implications of government economic policy, financial regulation, risk management and more, according to the firm.

"We're very lucky to have the opportunity to work with Jeremy," Andrew Feldstein, CEO of BlueMountain, said in a statement. "He has been widely recognized by leaders in government, academia and the private sector for his talent and impact. His experience, research interests and intellect will add real value to BlueMountain's investors."

From Washington to Wall Street

The gig isn't Stein's first consulting position for an asset manager. He helped Guggenheim Partners design quantitative asset management strategies from 2005 to 2007, according to Harvard disclosures. He also was a senior advisor to the Treasury secretary and on the staff of the National Economic Council in 2009.

BlueMountain also employs Jes Staley, former CEO of JPMorgan Asset Management. Staley, a managing partner at the investment firm, is a member of the investor advisory committee on financial markets at the Federal Reserve Bank of New York.

The New York-based firm has grown quickly, from $12.7 billion under management on Jan. 31, 2013, to more than $20 billion today. BlueMountain was founded in 2003 and is best known for credit investing. Strategies now also include stocks, real estate and emerging markets.

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Stein's move to hedge funds is relatively common.

Other examples include former Treasury Secretary Larry Summers, who consulted for D.E. Shaw; former Fed Chairman Alan Greenspan, who did work with Paulson & Co; former White House chief of staff Bill Daley, who became head of U.S. operations at Argentière Capital; and former top economist to President Barack Obama Austan Goolsbee, who advises hedge funds and other clients through a contract with 32 Advisors.

Others with their own economic consulting firms include former President George W. Bush's economic advisor Larry Lindsey, who runs The Lindsey Group, and former Fed Gov. Larry Meyer, who co-founded Macroeconomic Advisors.

Examples outside of hedge funds include former Treasury Secretary Tim Geithner, who joined private equity firm Warburg Pincus; retired Gen. David Petraeus, who joined PE giant KKR & Co.; and former White House budget director Peter Orszag, who joined Citigroup.

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