After a period of better performance for the sector, managers, investors and senior prime brokerage pros are predicting a more positive launch environment over the next six to 12 months.
As our 20 for 2018 highlights, a number of talented investment professionals who have proved themselves at big names – such as Izzy Englander’s Millennium Management, Harvard Management Company, DE Shaw and Eton Park – are all preparing significant launches.
The recent optimism has yet to funnel through to our launch data however, with research of start-up activity for the first half of the year noting a rise in launches but fall in total launch AuM.
The number of new hedge fund launches with $50m or more in assets grew by a marginal 3% in the first half of 2017, while the assets raised fell by 6.3%.
There were 38 new $50m-plus hedge funds launched globally in the first half of 2017 that collectively raised $12.9bn. For the same period in 2016, 37 new funds were launched with $13.7bn.
Global equity strategies accounted for the greatest number of new funds and assets raised in the first half of 2017. There were seven global equity funds launched that collectively raised $3.6bn.
Assets raised by macro launches followed closely behind with five funds raising $3.5bn. Multi-strategy, credit and European equities were the next three most popular launch strategies for the first half of the year.
The 20 for 2018 list includes managers leaving multi-strategy giants Millennium Management and Citadel to go it alone. Sara Nainzadeh’s Centenus Global Management was highlighted by a number of experts canvassed by HFMWeek, with Izzy Englander’s $34bn firm providing at least $500m of backing.
New entities springing forth from shuttered firms is a reoccurring theme with this annual run down and we include two firms that have launched following the decision of Harvard Management Company to close its internal hedge fund team.
A number of former Eton Park pros are also represented while the CIO of Blackstone’s Senfina proposition, which shut down at the end of last year, is also planning a new firm.
Of the 20 picks, 11 are equities focused, three are macro, three are multi-strategy, two are credit and two are relative value. Only two are majority systematic-based.
The list has been put together based on the views of a range of investors and senior prime brokerage pros across the globe, alongside the views of HFM’s team of journalists and data analysts. We hope you enjoy the run-down.
Founders: Antoine Estier, Igor Hordiyevych, Alex Garrard, Marat Djafarov
Founded: November 2016, London
The discretionary macro fund officially launched on 1 June with $750m in AuM, surpassing its initial $500m target launch size, following a significant sovereign wealth fund investment.
As of October 2017, Amia is understood to have $880m in AuM and a team of 19 people. PB sources say Amia has the potential to “raise billions” thanks to founder Antoine Estier’s reputation among allocators. Estier, who was previously a CIO of the BTG Pactual GEMM Fund, which managed $5bn in AuM at its peak, founded Amia alongside three former BTG colleagues. Other founding partners are CEO Igor Hordiyevych, and portfolio managers Alex Garrard and Marat Djafarov.
Antecapio Investment Partners
Founders: Rick Doucette and Gerry Polizzi
Founded: December 2016, Connecticut
New York-based Antecapio Investment Partners is slated to launch in Q1 of 2018, with an expected range of $100m to $300m in investor commitments.
The firm, founded by Rick Doucette, who was COO at asset management firm Weiss Multi-Strategy Advisers, and senior prime brokerage salesman at UBS Gerry Polizzi, also the fund’s COO, is targeting insurance companies, pension funds and high net-worth investors.
The multi-strategy fund will include AI and machine learning tools, according to sources. The firm has a staff of seven people, with plans to go up to as much as 10 by the time it launches.
Antler Capital Partners
Founder: Georges Gedeon
Founded: May 2017, London
This former Millennium portfolio manager’s fund is set to launch with almost £300m ($400m), with day-one capital from a number of managed account investors, according to sources.
At Millennium, Asia-based Gedeon was mainly focusing on global credit, while his new fund will be a mix of equity and credit. Before he started to work at Millennium, Gedeon was a CIO and co-ran Paris-based Mereor Investment Management with former Goldman Sachs partner Jean-Luc Biamonti. The asset manager focused on merger arbitrage and credit strategies and Gedeon oversaw the management of the Mereor Absolute Return Fund. Before Mereor, he was an investment manager at GLG Partners.
Founder: Parvinder Thiara
Founded: July 2017, New York
Parvinder Thiara, who previously worked for DE Shaw’s Oculus Fund, is expected to launch Athanor Capital with a few hundred million dollars in backing at the end of this year.
The early-thirties Harvard graduate worked for DE Shaw from late 2008 to late 2015. His responsibilities at the $41bn New York-headquartered firm included working on its Oculus Fund, where he was part of a team specialising in macro trends. The discretionary relative value fund is in talks with several investors including endowments, sovereign wealth funds, and family offices for a likely sizeable launch. The team consists of 10 people and recently moved to a midtown New York office.
Founder: Anirudh Singh
Founded: June 2017, London
Former Eton Park credit trader Anirudh Singh is preparing to launch his own credit strategy after leaving Eric Mindich’s shuttering firm.
Another co-founder of Aptior will be Christian Schwarz, who’s been the head of operations for Eton Park’s international business covering the EU, emerging markets and Asia after joining the firm in August 2008.
Singh, who took over the management of Eton Park’s credit book after Robert Dafforn left to found Bybrook Capital, is widely tipped as one to watch in terms of European asset-raising. Launch AuM should surpass $100m, with some sources expecting it to be well above $200m.
Cambridge Square Capital
Founder: Marco Barrozo
Founded: February 2017, Boston
One of a number of former Harvard Management Company traders launching new funds, Marco Barrozo launched Boston-based Cambridge Square earlier this year.
Thus far the global fixed income firm has accumulated at least $600m in assets after launching in March with $125m.
In the past few months, Barrozo hired Apoorva Koticha as chief executive, a former colleague at HMC. Also on the team are Jeff Crispen who is the firm’s COO/CFO and CCO and former HMC portfolio manager Willis Ho. Cambridge Square invests in derivatives tied to global interest rates and currency exchanges, attempting to profit from relative value opportunities and market volatility.
Centenus Global Management
Founder: Sara Nainzadeh
Founded: June 2017, New York
There is a lot of buzz around former Millennium portfolio manager Sara Nainzadeh’s new fund, Centenus Global Management, slated to launch late this year.
She received around $500m to $600m in backing from Millennium and could potentially be aiming to launch her equities-focused shop with around $700m in AuM, sources knowledgeable about the launch said. Other members of the team include former Goldman Sachs prime brokerage pro Michael Fazzari as CFO, Warren Sckolnick as COO/CCO and former head of content sales Benjamin Vogel as vice president of operations and resources. Word on the street is Nainzadeh recently signed the lease for a midtown Manhattan office on Madison Avenue.
Deep Basin Capital
Founder: Matthew Smith
Founded: January 2017, Stamford CT
Matthew Smith, former portfolio manager for Citadel’s Surveyor Capital launched his equities-focused fund in September with approximately $100m in AuM. The fund employs a market-neutral approach, focusing on equities in energy and energy-related sectors.
Deep Basin has around 11 people in its team including: COO and CCO Harry Hjardemaal, previously COO of Scopia Capital and Aristeia Capital; former Surveyor Capital analyst Ian Singer as a director in investment research; and former PwC auditor Elan Foxman as senior controller. Kyle Balaux, also from Citadel, joined the fund in September.
Deep Basin is understood to be in talks with two anchor investors who could raise its AuM significantly.
Diameter Capital Partners
FounderS: Jonathan Lewinsohn and Scott Goodwin
Founded: February 2017, New York
Anchorage duo Jonathan Lewinsohn and Scott Goodwin launched one of the biggest start-ups of the year in September, raising $1bn in a founders’ round for their new credit strategy.
Lewinsohn worked at Anchorage as head of research between 2007 to 2013 while Goodwin was a portfolio manager and global head of trading at the firm. Early staffers include SoundPoint Capital investment analyst Harsh Kondapalli.
Recently, Diameter was said to be in advanced talks with $23.5bn BlackRock Alternative Advisors (BAA) for a potential sub-$100m day one investment, according industry sources, while a number of large institutional investors have been taking a very keen interest.
Founder: Nick Thakore
Founded: August 2017, Boston
Set up by US co-head of equities at Putnam Investments Nick Thakore, Diametric Capital launched with more than $250m in initial AuM.
The Boston-based long/short equity start-up, which started trading in August, has divided its AuM into three vehicles called the True Alpha Market Neutral Fund, the True Alpha Enhanced Market Neutral Fund and the True Alpha S&P 500 Fund.
Sources close to fund say it has at least $125m of incoming additional allocations in the coming months.
Other PMs at the firm are George Gianarikas, Eric Lambrecht, Ben Banwart, Ryan Worst, Steve Rettke and Morid Kamshad.
Founder: Parag Pande
Founded: June 2017, New York
Former Blackstone Senfina CIO Parag Pande is targeting a Q1 launch for his multi-manager proposition, Dristi Capital Partners.
Dristi will have similarities to Senfina in structure. However, it will take a market-neutral approach and will not incorporate a centre book of best ideas. The fund has eight staff members, including former Senfina PM Billal Sikander and two Eton Park pros: COO David Zalta and chief risk officer Hongchao Wang. Recently, Dristi hired an analyst who previously worked with Ziff Brothers and Senfina. The firm plans to hire another three to six people early next year, sources said. Dristi is expected to draw in between $200m to $500m in early-door investor allocations.
Elan Capital Management
Founder: Renos Dimitriou
Founded: June 2017, London
The $1.7bn government bond-trading team at Pine River Capital Management in London, led by Renos Dimitriou, will spin out as Elan Capital Management in January.
Apart from Dimitriou, the ex-head of European government bond trading at RBS, and another Pine River pro, Aatu Vainola, the firm will count ex-Prologue Capital COO Duncan Tiplady among its employees.
Sources agree this launch will be among the biggest in Europe next year and say that it is attracting considerable interest from pension funds. One investor source said the manager is being “quite hard” in fee discussions given its decent track record, which has annualised at around 11% since inception in 2011.
Founder: Brandon Haley
Founded: April 2017, New York
Dubbed by some industry sources as a “home-run”, Citadel’s former head of global equities, Brandon Haley, launched Holocene Advisors with around $1.5bn earlier this year.
The firm, named after the Holocene Epoch at the end of the last Ice Age, has grown quickly through the year and had reached $2.4bn by the end of June. Holocene runs an equity long/short strategy, focusing on “alpha generation through deep, fundamental research conducted by sector-focused investment teams”, according to its website. Senior staff include Julia Dailey, who was previously COO at Broadfin Capital.
Founder: Jose Marques
Founded: April 2017, New York
Former head of trading at Ray Dalio’s $150bn Bridgewater Associates Jose Marques is targeting a Q1 launch for his quantitative equity long/short firm, Inferent Capital.
The strategy is set to include a mix of machine learning and AI tools. Targeting to launch with north of a couple of hundred million, Inferent Capital will take positions across a multitude of sectors.
Among the firm’s recent hires are Karen Bertoli, who co-founded artificial intelligence analytics firm Almax Analytics. The operations team is said to be fully in place, with the recent hire of a CFO and head of technology, who is joining from a large quant shop, sources say.
Founder: Hari Ravisankar
Founded: July 2017, Hong Kong
Former Janchor Partners portfolio manager Hari Ravisankar recently launched his new venture, Ishana Capital, having received seeding from HS Group
Market sources say the fund launched at around $200m, making it a bright spot in an otherwise tough asset raising environment for Asia start-ups. Ravisankar, who runs a strategy based on a combination of equity and credit trades in Hong Kong, China and India, has “a good reputation on the street”, mostly owing to the decisions he made while trading at Janchor, including a hugely successful bet on Alibaba. He is joined by Silas Xu, a former long/short equity portfolio manager at Turiya Capital.
Founder: Thomas Wong
Founded: August 2017 (dealing licence granted), Hong Kong
Ex-Credit Suisse head of Hong Kong and China research and sales Thomas Wong is another rare Asian start-up success story. Hong Kong-based Optimas runs a market neutral, equity l/s strategy, which has quickly grown to $300m with decent performance.
“They haven’t really hit the marketing road and gone to the US yet with their pitch so that’s definitely one to watch in terms of future growth,” one cap intro pro says.
Wong joined Credit Suisse in 2013 from Bank of America Merrill Lynch, where he was the head of Greater China research for four years and was widely credited for re-building and leading its Greater China research franchise.
Quantitative and Systematic Asset Management (Qsam)
Founders: Pierre-Yves Morlat, Laurent Laizet, Seah Rhie
Founded: October 2016 (FCA registration within Credit Suisse), London
The $1bn quant hedge fund of Credit Suisse Asset Management is set to spin out of its parent company later this year as part of a management buyout.
The new entity is set to be among the largest European hedge fund launches of 2017. The unit, headed by Pierre-Yves Morlat, manages the quant equities-focused Qube Fund, which launched in October last year by Credit Suisse’s systematic market-making group.
It is understood Qube launched near its $1bn capacity with a number of external institutional investors and Credit Suisse as an anchor investor. QSAM’s team of nearly 100 people will be spread across London, Paris, Hong Kong and Mumbai.
Seiga Asset Management
Founder: Keita Arisawa
Founded: March 2017, Hong Kong
Seiga launched its pan-Asia equity long/short master fund in May and is considered among the most significant hedge fund start-ups to emerge in the region this year.
Founded by the former head of TPG-Axon in Asia Keita Arisawa, it received around $100m in seed capital from Blackstone. Arisawa is understood to be continuing to raise significant interest among other investors.
“The allocation from Blackstone, which hasn’t made an investment in an Asian fund for quite some time, is really the shining moment for Seiga,” one local source said. Arisawa is supported by another ex TPG-Axon pro Irene Law, who is COO.
FounderS: Arnaud Langlois, Pierre Lenders
Founded: June 2017, London
Former Millennium and Brevan Howard Asset Management trader Arnaud Langlois is preparing to launch a global long/short equity fund named TerreNeuve Capital, alongside Prius Partners co-founder Pierre Langlois who will be CEO.
According to sources, the new fund is set to incorporate environmental, social and governance (ESG) factors into its investment process and will focus on sectors where these factors increasingly matter, such as consumer, chemicals and med tech.
The duo is set to raise north of $200m, according to market reports, with allocators’ appetite for ESG-driven strategies supporting asset-raising. Langlois most recently worked at Millennium Partners between November 2013 and June 2017.
Founders: Graig Fantuzzi and Michele Toscani
Founded: August 2017, Boston
Ex-Harvard Management Company (HMC) pros Graig Fantuzzi and Michele Toscani launched their highly anticipated relative value fund TPRV Capital in September.
The fund, which received backing from HMC of $400m, now has around $500m in AuM, according to sources who say it is hoping to raise between $800m and $1bn by the end of Q1 2018. Although the bulk of the 17-person team comes from HCM, other team members include chief risk officer Jeffrey Garnett, formerly director of risk at Fortress Investment Group; COO Luca Toscani, previously partner at Auxano Capital Partners ; and CFO and CCO Christopher Shakal, a former Serengeti Asset Management controller.
Where are they now – the pick of last year’s crop
David Allen’s CPPIB spin out received a 500m ($592m) allocation in April from PSP Investments and recently added James McCunn from Castle Hill as head of ops. The team includes ex-Credit Suisse trader Matthew Courey as COO and Safraz Zavahir as GC/CCO, who joined from Davidson Kempner.
London-based macro firm Alpstone was founded by ex-BlueCrest partners Frederic Favre, Alexandre Germak and Melanie Owen. During its first 11 months they’ve returned 1.2%, according to sources. “Considering how badly macro has done this year, their performance is not disastrous,” one investor source said.
Level Global Investors co-founder Anthony Chiasson launched Aurmedis Global Investors in May 2016 after he was exonerated from insider trading charges. Hires include ex-Tiger Management CCO Neil Schwartzas as general counsel and CFO Marc Abel, brought in from Eisenstat Capital. The firm managed $26.9m on 1 January; it was unavailable to provide an updated asset size.
KKR’s former head of special situations in Europe Mubashir Mukadam’s fund is expected to officially launch towards the end of 2017. The London-based firm will operate a private credit strategy investing in special situations predominantly focused on Europe and agnostic of industry, asset type and capital structure.
Boasting an impressive line-up including PointState, Goldman Sachs and Morgan Stanley alumni, this credit and equity-focused hedge fund continues to be tipped as one to watch by industry sources. Blockhouse launched its first fund at the end of 2016 and today has $400m in AuM.
Broad Reach Investment Management
Ex-Spinnaker Capital portfolio manager Bradley Wickens launched the emerging markets-focused fund with assets from two Spinnaker partners to trade across a range of assets as part of a global macro strategy. Sources say performance has picked up after a tough start to the year.
Castle Hook Partners
Founded by Soros Fund Management alumni David Rogers and Joshua Donfeld and backed by anchor investor Stan Druckenmiller, Castle Hook Fund launched in November 2016 with $900m in AuM. Other senior staff include former Och-Ziff Capital director Sean Rhatigan as CFO and COO.
Duane Park Capital
David DePaolo, Dominick Maggio and Andrew Goodwin launched their debut long/short credit fund in January 2017 with a $200m seed from JP Morgan Alternative Asset Management. The firm’s AuM currently stands at $265m, with an investment team of six.
Marcello Sallusti’s global long/short equity fund Engadine Partners launched in January. It beefed up its operations in May with the hire of COO Chude Chidi-Ofong, who previously headed up ops for Eton Park and London start-up Ledbury Capital. Industry experts highlight the firm as one expected to shine in the coming years.
Honeycomb Asset Management
Founded in October 2015 by former SAC fund manager David Fiszel, Honeycomb launched its debut fund, focused on public equities, in June 2016 with around $200m. By March, the firm had grown its AuM to $330m with decent performance recorded. Current AuM is up to $500m.
The pan-Asia l/s equity fund launched last October with between $100m and $200m and quickly grew to around $500m. Industry sources suggest the Hong Kong-based fund, founded by ex-Point72 portfolio manager William Leung, is now around $1bn, helped by strong performance. Rumours say he may have refused a proposed allocation from former boss Steve Cohen.
Vikram Kumar’s fund spun out of TT International, acquiring the $496m portfolio of the TT Long-Short Focus Fund. It launched as planned at the beginning of 2017 and invests in European mid-cap focused equities on a long/short basis. It also hired Jabre Capital COO Padraig Hayes as COO in September although current AuM is unknown.
Light Sky Macro
Former Brevan Howard Partner Ben Melkman began trading in March with $400m, with backing reportedly coming from Moore Capital’s Louis Bacon, Third Point’s Dan Loeb and Point72’s Steve Cohen. The fund has grown its AuM significantly since then and had reached $1.6bn by the end of June.
Ex-Paulson & Co partner Samantha Greenberg’s fund launched in April 2016 with a $130m seed investment from Ramius. The firm currently has $200m in AuM and this year brought in Alex Shaftal and Michael Kimlat, from Paulson & Co and York Capital, respectively.
Seyon Asset Management
Australian seeder Ascalon backed this multi-strat start-up with a pan-Asian trading focus launched by Nomura pros Pradeep Swamy and Fred Lam and Aima’s former Asia-pacific chief Heidi Blunt. Seyon is one of a handful of low-net, multi-strategy firms in Asia and is looking to tap into an investor base increasingly focused on higher global volatility and widening credit spreads.
After securing backing from Brummer & Partners, Marco Soldo launched his equity l/s fund with $250m in AuM last summer. However, after delivering negative performance, Brummer decided to withdraw the allocation. Now Soldo is looking to relaunch with external investment, according to sources.
Ex-Balyasny Asia head Avinash Abraham launched his Hong Kong-based fund in November last year with the aim of following his ex-employer’s model of creating a multi-strategy platform in the region. Since inception, the firm, which employs 13 people, has delivered double-digit returns and has around $200m in AuM, HFMWeek understands.