WHEN: Today, Thursday, May 12th
WHERE: CNBC's "The Strategy Session"
Following is the unofficial transcript of breaking news from CNBC's Kate Kelly. All references must be sourced to CNBC.
DAVID FABER: I DO WANT TO GET TO SOME BREAKING NEWS. IT LOOKS LIKE A DOUBLE DOSE OF BAD NEWS FOR ONE OF THE GLOBE'S LARGEST HEDGE FUNDS, LONDON HEDGE FUND GIANT BREVAN HOWARD, LOSING A TOP TRADER AND SHUTTING THE BOOKS ON ONE OF ITS KEY FUNDS. KATE KELLY OF COURSE I HAVE JUST STOLEN ALL OF YOUR THUNDER IT WAS WRITTEN THERE FOR ME, BUT TELL US WHAT'S GOING ON HERE PLEASE.
KATE KELLY: THERE'S NOTHING ELSE TO SAY, DAVID. NO JUST KIDDING. SO FABRIZIO GALLO, WHO RAN PROP TRADING AT MORGAN STANLEY UNTIL 2009 AND WENT OVER TO BREVAN HOWARD THAT YEAR TO TAKE OVER THEIR EQUITIES STRATEGIES FUND, IS LEAVING AND IS GOING TO BANK OF AMERICA, I AM TOLD TO BE CO-HEAD OF EQUITIES. ESSENTIALLY WHAT'S GOING ON AT BREVAN, IS THAT THEY ARE GOING TO SHUT DOWN THIS EQUITIES STRATEGIES FUND WHICH WAS ABOUT 600 MILLION IN SIZE. SO NOT HUGE, ESPECIALLY IN THE CONTEXT OF ONE OF THE WORLD'S LARGEST HEDGE FUND COMPANIES THAT MANAGES 32 BILLION DOLLARS. BUT, A COUPLE OF INTERESTING THINGS HERE, DAVID. FIRST OF ALL, THERE HAVE BEEN WILD RUMORS ABOUT BREVAN GETTING REDEMPTIONS, POSSIBLY RETURNING CAPITAL, PERSONNEL CHANGES. SO NOW, I SEE WHERE SOME OF THAT WAS COMING FROM. I MEAN, ESSENTIALLY, FABRIZIO WAS GETTING READY TO GO AND PEOPLE KNEW ABOUT THAT. BUT THE OTHER INTERESTING THING IS THEIR MASTER FUND, RUN BY ALAN HOWARD, HAS ABOUT 24 BILLION DOLLARS UNDER MANAGEMENT RIGHT NOW. AND THEY HAVE SAID TO INVESTORS THROUGHOUT THE YEAR, WE DON'T WANT THIS TO GET HIGHER THAN 25. IT'S JUST TOO MUCH MONEY TO MANAGE, WE NEED TO A LITTLE MORE NIMBLE THAN THAT. SO, IF THEY DO GET TO THAT POINT DURING, YOU KNOW, THE COURSE OF THIS YEAR, THEY PROBABLY WILL GIVE CAPITAL BACK. THEY ALSO HAVE HAD REDEMPTIONS, BUT I'M TOLD THAT IT'S NOT A HUGE CONCERN.
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