MS Morgan Stanley

An investment firm run founded by a former Morgan Stanley executive has acquired Phibro LLC, assets tied to the commodities firm that came to prominence under oil trader Andrew Hall.

Energy Arbitrage Partners, a firm founded by Simon GreenshieldS, the former co-head of Morgan Stanley's commodities department, said his new Phibro business will be a commodity merchant company.

Financial terms of the deal weren't disclosed.

The acquisition comes after The Wall Street Journal reported in late 2014 that Phibro Trading LLC would close its doors in the U.S. after it failed to find a buyer. Public furor over a $100 million payday for Mr. Hall in 2009, when Phibro was part of Citigroup Inc., spurred the trading firm's sale to Occidental Petroleum Inc. Citigroup was criticized for guaranteeing Mr. Hall a hefty bonus at a time when the New York bank required a bailout from the U.S. government.

Phibro specialized in physical trading of oil and other raw materials, seeking to profit by moving actual barrels and acting as an intermediary between producers and consumers. The pool of potential buyers for those kinds of operations dwindled in recent years amid a regulatory crackdown on Wall Street banks' involvement in these markets.

At the new Phibro business, Mr. Greenshields will assume the role of president and CEO. Nick Elliot and Thomas Funk, both of whom were formerly at Morgan Stanley, will join Phibro as partners.

"The continued volatility in these markets, in addition to the departure of several formerly large and important players, has created an environment where an entrepreneurial merchant firm can create value by capitalizing on market dislocations," Mr. Greenshields said.

Write to Lauren Pollock at lauren.pollock@wsj.com

(END) Dow Jones Newswires

January 26, 2016 18:05 ET (23:05 GMT)

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