SURGING CITADEL SETS STAGE FOR STREET FEUD

Bad blood could be stirring between JPMorgan Chase CEO Jamie Dimon and Ken Griffin, the Wall Street wunderkind who’s beefing up his buzz-gathering hedge fund.

Griffin, the 39-year-old founder of the $20 billion investment fund Citadel, recently poached JPMorgan’s fixed-income chief, Patrik Edsparr, who starts in July as chief of Citadel’s European division.

The move is the latest to suggest that Griffin is prepping his firm to compete for business with the Street’s big banks.

Sources said Dimon’s chief beef with Griffin’s poaching was how it played out days before the bank engineered its buyout of Bear Stearns.

On Friday, March 14, two days before news of the buyout surfaced, JPMorgan execs called Edsparr in London to fly to New York to be a part of the gunshot-wedding deal team that was to hash over Bear’s books.

At that point, Edsparr, a 10-year JPMorgan vet who had planned to announce his departure the following week, was forced to make public his move to Chicago-based Citadel.

A JPMorgan spokesman and Edsparr both declined to comment.

Some insiders at JPMorgan, however, insist a recent retooling of JPMorgan’s investment-banking biz would have occurred even had Edsparr stayed on board.

To be sure, Citadel doesn’t want the Edsparr hiring to sour relations with the Street as it attempts to grow its business and compete with firms that it also must join in future transactions.

Griffin – like Dimon at JPMorgan – is managing the credit crunch with fewer bumps and bruises than other top execs. As a result, the hedge fund, which is blurring the lines between financial firms, has been luring rivals’ high-level talent.

In an effort to ensure that he’s not creating too much ill will, Griffin has been known to call execs at the firms from which he is luring talent and try to smooth over ruffled feathers.

Of late, Citadel has been on a hiring binge in the US and abroad that could presage an eventual initial public offering.

The firm is soon expected to announce the nabbing of Nick Taylor, who manages internal hedge funds at Credit Suisse in the Asian-Pacific region and in Europe.

The hedge fund pro, who has yet to resign from his current post, could not be reached for comment.

A Citadel spokeswoman declined to comment. [email protected]