Long Term Capital Management's Co-Founder Starts New Hedge Fund

Discussion in 'Trading' started by ByLoSellHi, May 9, 2007.

  1. First Brian Hunter, now him.

    When are they bringing Henry Blodget back?

    Long-Term Capital's Rosenfeld Starts Hedge Fund, Person Says

    By Jenny Strasburg


    May 9 (Bloomberg) --
    Eric Rosenfeld, co-founder of Long- Term Capital Management LP, and two of his former colleagues are starting a hedge fund that uses computers to pick investments, said a person with knowledge of the plan.

    Rosenfeld, most recently president of Paloma Partners LLC in Greenwich, Connecticut, reunited with Robert Shustak and Bruce Wilson to open Quantitative Alternatives LLC, said the person, who declined to be identified because the hedge fund isn't trading yet. Shustak was Long-Term Capital's chief financial officer and Wilson was controller.

    Long-Term Capital required a $3.5 billion bailout from the world's biggest securities firms and banks that was orchestrated by the New York Federal Reserve Bank in 1998 after $4 billion of losses. Rosenfeld was one of the original partners at Long-Term Capital with John Meriwether, his former boss at New York-based investment bank Salomon Inc.

    ``Investors are mature enough not to be casting judgments on something that happened nine years ago in a very different environment,'' said Mathieu Klein, chief executive officer of Paris-based investment adviser Darius Capital Partners, which isn't investing in Rosenfeld's new firm. ``They'll have to prove themselves because investors have a lot of alternatives.''

    Quantitative Alternatives, based in Rye Brook, New York, is hiring research analysts and traders who make bets on currencies, stocks and bonds using statistical models. Trading may start later this year, said the person, who didn't know how much money the partners have raised.

    Rosenfeld, 53, declined to comment.

    Investment Experience

    Rosenfeld previously was head of fixed-income trading and an executive committee member at Salomon. Following the demise of Long-Term Capital, he helped Meriwether start Greenwich, Connecticut-based JWM Partners LLC before joining Paloma Partners. He also was a professor at Harvard Business School in Boston.

    Shustak, 49, most recently was chief operating officer of Strategic Value Partners LLC. The London-based firm, which manages more than $4 billion, was started in 2001 by former Merrill Lynch & Co. managing director Victor Khosla. At Long- Term Capital, Shustak helped develop multistrategy funds and manage firm operations.

    Wilson, 46, formerly was president and chief operating officer of Greenwich-based hedge-fund manager Quantitative Financial Strategies Inc., and a managing director at Morgan Stanley.

    Other former Long-Term Capital executives to strike out on their own include Myron Scholes, the Nobel Prize-winning economist, who went on to start Rye Brook-based Platinum Grove Asset Management LP. Hans Hufschmid, a former currency trader who was a principal at Long-Term Capital, opened GlobeOp Financial Services LLC, a third-party administrator for hedge funds based in London and New York.

    Hedge funds are private, largely unregulated pools of capital whose managers can buy or sell any assets and participate substantially in profits from money invested.
  2. wave


    Very interesting. Thanks.
  3. These guys spend so much time and money trying to beat the market...
  4. 0008


    This is why HF are so dangerous. They don't need to respond to what they do.
  5. Starting another hedge fund, it's OK.

    Using computers again? Didn't they learn the lesson.
  6. nitro


    My sentiments are exactly the opposite. It is because of the lessons they learned that they are doing it again, in exactly the same way. The only thing they have to do this time is have a risk manager that says, NO more leverage.