For small and mid-sized hedge funds, David “Tiger” Williams has always offered the outsourced trading desk that would pay attention when Wall Street wouldn’t. And he’s promising to maintain that high-touch independence, while simultaneously partnering with one of the nation’s biggest banks.
Williams Trading and Wells Fargo (WFC) today are expected to announce that they have created a single listed options desk that will service clients of both firms. Two Williams traders already are seated, while Wells is in the process of assigning and/or hiring staff. No financial terms have been disclosed for the arrangement, which is not open-ended (reevaluation will occur at a later date).
“As the relationship develops, it’s possible that we will expand it into areas like the international and prime brokerage,” Williams tells Fortune.com. “What our current clients know is that the way I’ve run the business – super high-touch with incredibly talented individuals – is never going to be compromised.”
This is Williams’ first formal partnership with a large financial firm, but not the first time he’s had the opportunity. Williams tells me that both Goldman Sachs and Morgan Stanley expressed serious interest back in 2000, while subsequent suitors have included BNP Paribas and UBS. In fact, Williams even got a term sheet in 2008, but was smart (or lucky) enough to turn it down.
Williams says that the Wells deal will provide existing clients with exclusive access to additional resources, and that he was only willing to sign because Wells managed to avoid “the derivatives fiasco.” Well, at least until it acquired Wachovia…