Top Hedge Fund Managers Prepare to Launch New Ventures in 2024, According to Reuters

Top Hedge Fund Managers Prepare to Launch New Ventures in 2024, According to Reuters

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By Carolina Mandl and Nell Mackenzie

NEW YORK/LONDON (Reuters) – A bumper crop of 40 high-profile hedge fund launches by former portfolio managers of multibillion-dollar firms is expected this year, research firm PivotalPath and other brokers said. leading and industry sources.

Citadel traders Lone Pine Capital, Oaktree Capital Management and Paloma Partners are among those raising money for their own companies, people familiar with the matter said. Launches by executives who have recently left large companies typically attract a lot of interest from investors who expect to be able to replicate the performance of their former companies.

“A lot of these people have been extremely successful and may be looking for something more independent,” said Jon Caplis, managing director at hedge fund research firm PivotalPath, which tracks launches through prime brokers. and investors.

PivotalPath tracks 40 high-profile launches planned this year, compared to 26 expected this time last year. Top brokers and investors told Reuters they also expected many debuts from managers who left big companies.

Tommaso Trento, a former portfolio manager at global hedge fund giant Citadel, plans to launch Benchstone Capital Management, focusing on consumer and technology, media and telecommunications (TMT) stocks, a person familiar with the matter said. Trent plans to raise $750 million, the source said.

Arthur Wit, a former partner at Lone Pine Capital, is raising money for his Perryridge Capital, a long/short equity hedge fund focused on health care and industrials globally, a person familiar with the matter said . The launch is planned for the second half of the year.

In a rare female-led first firm, Chiki Gupta Brahm, another former Citadel portfolio manager, is expected to launch Tessellis Capital Management at the end of the year, trading industrial, consumer and financial stocks. TMT, a source said.

The sources declined to be identified because fundraising discussions are private.

The highest-profile multibillion-dollar hedge fund launches this year will come from former Millennium Management co-chief investment officer Bobby Jain and a spinoff of Capula Investment Management by partner Nat Dean, a source said.

Bloomberg previously announced its launch plans.

“Hedge funds are run by people from very good firms,” said Leor Shapiro, a Jefferies managing director overseeing capital introductions. “We’re seeing consistent demand.”

A strong pedigree is becoming increasingly important as industry consolidation makes it harder for new funds to compete with incumbents for investor cash, a BNP Paribas (OTC:) investor survey showed from February 29. Appetite for early launches declined slightly to 61% from 64% last year, according to the report.

Hedge funds returned 7.7% on average in 2023, according to PivotalPath, in a volatile year marked by bank failures and high interest rates that depressed the bond market.

High rates have boosted investor demand for credit funds, according to surveys by prime brokers Barclays and BNP Paribas. Credit funds will also be part of the launches this year.

Thomas Einhorn and Roger Schmitz, former portfolio managers at the roughly $4 billion Paloma Partners, aim to raise $500 million to invest in public credit, including some distressed opportunities, two sources said. Parliament Holdings is expected to launch in the second quarter.

Brad Boyd, formerly at Oaktree Capital Management, will launch a California-based multi-sector fixed-income hedge fund called Confido Capital, a source said.

Representatives for Parliament, Tessellis, Perryridge Capital, Benchstone, Dean, Jain Global and Confido declined to comment.

Spokespeople for Citadel, Lone Pine Capital, Oaktree Capital Management, Paloma Partners, Millennium Management and Capula declined or did not immediately respond to requests for comment.

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