New Hedge Funds: James Pallotta (Raptor Capital) & Christopher Pia (Pia Capital) ~ market folly

Thursday, February 26, 2009

New Hedge Funds: James Pallotta (Raptor Capital) & Christopher Pia (Pia Capital)

James Pallotta, formerly of Tudor Investment Corp, and Christopher Pia, formerly of Moore Capital Management have finally set out to launch their own funds. And, understandably, the market for raising capital has tempered their ambitious launches a bit. They are both launching, but with undoubtedly less capital than they probably anticipated.

Pallotta was in charge of the Raptor fund while at Tudor, where he placed global macro style bets on equities. We covered it when he announced he was starting his own fund and here we are again with his new fund spin-off/launch: Raptor Capital Management. We'll be tracking him from now on considering he was the one running the equities we tracked at Tudor. Raptor (while at Tudor) has seen 14% annual returns since 1993. The recent turmoil marks the longest losing record of Pallotta's career.

Pia, on the other hand, will not be trading equities, but rather currencies, commodities, bonds, and stock indexes in the true global macro style. Pia Capital Management will seek to hold 20-40 positions between 3 weeks to 3 months. So, unfortunately, we won't be tracking him since he won't be doing equities. Pia also has an outstanding track record, locking in 17% annual returns while at Moore Capital, having never had a down year.

Next, turning to Citadel, we see that Misha Malyshev has left with 2 members of his team. Malyshev was in charge of the high frequency trading unit at Citadel. And, while Citadel's main funds floundered last year, Malyshev was up around 40% last year. Its unlikely Malyshev will start a new fund in the next 18 months or so, due to restrictions in his contract.

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