Citadel Aims to Start $1 Billion Macro Hedge Fund Managed By Kaveh Alamouti ~ market folly

Friday, September 5, 2008

Citadel Aims to Start $1 Billion Macro Hedge Fund Managed By Kaveh Alamouti

Ahh, the endless cycle of hedge fund start-ups and failures. In contrast to my post earlier post about The Ospraie Fund blowing up here, I bring you news of a new fund emerging onto the scene. Ken Griffin's Citadel Investment Group is set to roll out their latest hedge fund, a $1 billion Global Macro Fund (pending funding, of course). Kaveh Alamouti, former employee of Macro giant Louis Bacon's Moore Capital Mangement, is set to run the fund.

We are slowly starting to see the next segway of "spinoffs" of apprentices from their masters. Years ago, Julian Robertson of Tiger Management helped mold some of the brightest minds on Wall Street, many of whom went on to start their own funds. The 'Tiger Cubs' as they are known, include greats such as John Griffin (Blue Ridge Capital), Stephen Mandel (Lone Pine Capital), Lee Ainslie (Maverick Capital), and Andreas Halvorsen (Viking Global Investors), all of whom I track here on the blog. The same can be said of the Commodities Corporation, which produced the likes of Bruce Kovner (Caxton Associates), Louis Bacon (Moore Capital Management), and Paul Tudor Jones (Tudor Investment Corp).

Now, we are starting to see these former proteges turned legends take on the role of their predecessors as they now watch their own employees/proteges emerge to manage their own funds. It's a beautifully endless cycle. Already, as I wrote about here, David Stemerman left Lone Pine Capital to start up Conatus Capital and Anand Parekh left Citadel to form Highliner Investment Group. And, as mentioned above, Kaveh Alamouti left Moore Capital Management to head up Citadel's new global macro fund. In this new spawning of "offspring," there will undoubtedly be picks of the litter, and then there will be runts. Only time will reveal who of them could possibly become the next Paul Tudor Jones or Julian Robertson. I will be watching with interest as I try to find the rising stars of tomorrow.

Source: Bloomberg