Merrill's Ehsani to Leave as Thain Cancels Hedge Fund

Boris Ehsani, head of one of Merrill Lynch & Co.'s most profitable trading groups, is leaving the U.S. securities firm after it canceled a plan to spin off his unit as an independent hedge fund, people familiar with the matter said.

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Merrill Chief Executive Officer John Thain is ratcheting back the firm's investments in hedge funds, private companies and real estate to reduce risk and free up capital. Merrill had developed the plan for Ehsani's fund for more than two years, at one point agreeing to seed it with at least $500 million, according to people with knowledge of the matter who declined to be identified because the plans weren't made public.