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Written by Carolina Mandl and Nell McKenzie
NEW YORK/LONDON (Reuters) – This year will be a bumper year with 40 high-profile hedge fund launches by former portfolio managers of multibillion-dollar companies, according to research firm Pivotal Path, other prime brokers and industry observers. It is said that it is expected to become
Traders at Citadel, Lone Pine Capital, Oaktree Capital Management and Paloma Partners are also raising money for their businesses, according to people familiar with the matter. Launches by management teams that have recently exited major companies typically attract a lot of interest from investors who hope they can replicate the performance of their previous stores.
“Many of these people are doing very well and are looking for more independent He may be looking for a business.”
PivotalPath is tracking 40 high-profile planned launches this year, compared to 26 expected this time last year. Prime brokers and investors told Reuters they also expected to see the debut of many executives who left big companies.
Tommaso Torrent, a former portfolio manager at global hedge fund giant Citadel, is investing in Benchstone Capital Management, which focuses on consumer and technology, media and telecommunications (TMT) stocks, according to people familiar with the matter. The plan is to launch one. Trent plans to raise $750 million, the people said.
Arthur Witt, a former partner at Lone Pine Capital, has raised money for Perry Ridge Capital, a long/short equity hedge fund focused on healthcare and industrials around the world, according to people familiar with the matter. He says he is collecting them. Release is scheduled for the second half of this year.
In an unusual female-led debut, Chiki Gupta Brahm, another former Citadel portfolio manager, will launch Tesselis Capital Management at the end of the year to trade industrial, consumer and TMT stocks. This is planned, sources said.
The sources declined to be identified as funding discussions are private.
One of the sources said the year’s most high-profile multibillion-dollar hedge fund launch was a Capra investment by former Millennium Management co-chief investment officer Bobby Jain and his partner Nat Dean. It is said to be a spin-off of Investment Management.
Bloomberg previously reported on their launch plans.
“Hedge funds are run by people with really good corporate backgrounds,” said Leor Shapiro, a managing director at Jefferies who oversees capital deployments. “We’re seeing steady demand.”
Strong pedigrees are becoming more important as industry consolidation makes it harder for emerging funds to compete with established funds for investors’ cash, according to a BNP Paribas investor survey conducted on February 29. It was shown that It found that appetite for early-stage launches had fallen slightly to 61% from 64% last year.
Despite a volatile year in which bank failures and high interest rates depressed bond markets, hedge funds returned an average of 7.7% in 2023, according to Pivotal Path.
High interest rates are driving investors’ demand for credit funds, according to a survey by prime brokers Barclays and BNP Paribas. A credit fund is also scheduled to be launched this year.
Thomas Einhorn and Roger Schmitz, former portfolio managers at Paloma Partners, which is worth about $4 billion, has about $500 million in public credit investments, including some distressed deals, two people familiar with the matter said. It is said that they are aiming to raise US dollars. Parliament Holdings’ launch is scheduled for the second quarter.
Brad Boyd, formerly of Oaktree Capital Management, plans to launch Confido Capital, a California-based multi-sector bond hedge fund, according to people familiar with the matter.
Representatives for Congress, Tesselis, Perryridge Capital, Benchstone, Dean, Jayne Global and Confido declined to comment.
Spokespeople for Citadel, Lone Pine Capital, Oaktree Capital Management, Paloma Partners, Millennium Management and Capra either declined or did not immediately respond to requests for comment.
(Reporting by Carolina Mandl in New York and Nell McKenzie in London; Editing by Michelle Price and Richard Chan)
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