The Royal Bank of Canada (RBC) is planning to invest as much as US$1 billion into hedge fund spinoff of its proprietary-trading business in the US.
The new unit, Taursa Capital Partners, is expected to be launched officially by the end of 2014, Bloomberg reported quoting anonymous sources familiar with the company’s plans.
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RBC Capital Markets former co-head Mark Standish is to be appointed the principal of the fund, along with RBC global arbitrage and trading business head Richard Tavoso and the unit’s head trader Ed McBride, the people revealed.
Royal Bank spokesman Kevin Foster told the news agency, "We are actively working to restructure our proprietary-trading business to comply with the Volcker Rule."
The spinoff was one of the strategic options the bank was seeking for its arbitrage and trading unit following the Volcker Rule introduced by the US authority earlier I December 2013.
The mandate is aimed at refraining banks from trading with their own money to avoid them from taking too much risk.
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By GlobalDataRoyal Bank would invest in the new fund without retaining an ownership stake, the sources told the publication.
