JPMorgan Chairman Leaves for Hedge Fund BlueMountain

Jamie Dimon's inner circle has gotten smaller with the departure of a longtime lieutenant and onetime heir apparent.

JPMorgan Chase (JPM) chairman Jes Staley is joining the hedge fund BlueMountain Capital as a managing partner. He will be responsible for developing client relationships and will help direct the firm's strategy, according to a news release.

Staley, once considered a top candidate to succeed Dimon at the helm of JPMorgan, appeared to be passed over in the executive reshuffling that followed the bank's huge losses in the London Whale debacle this summer. Staley was promoted from head of investment banking to chairman of the combined investment and corporate bank, a change that analysts said reduced his chances of eventually replacing Dimon.

This October it was reported that Staley was considering leaving JPMorgan for the top position at Barclays, before it was given to an internal candidate.

"Jes is one of the most experienced and successful leaders in the industry and has played a key role at one of the world's most successful financial institutions. Not only has he had a front row seat for the evolution of the financial industry, but he's also one of the most ethical people we've worked with," BlueMountain CEO and chief investment officer Andrew Feldstein said in the news release.

The Financial Times reports that BlueMountain was one of the funds that helped bring down the London Whale trader by betting against the bank's corporate credit positions.