Merrill, Lehman prop chiefs to launch hedge funds

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Merrill Lynch and Lehman Brothers are set to lose key prop traders, both of whom are reportedly leaving to set up their own hedge funds.

Boris Ehsani, head of Merrill Lynch’s principal credit group, is leaving following the bank’s decision to cancel plans to spin off his division as an independent hedge fund, which had been in development for more than two years, according to Bloomberg.

Ehsani’s group, a staff of 30, reportedly oversees $2.8 billion and produced $461 million in total revenues last year. At one point, reports said, the bank agreed to seed Ehsani’s fund with $500