The long tradition of successful hedge fund managers guiding protégés toward new fund launches has continued. Joseph Rotter, once a top executive at Citadel, the $26 billion hedge fund of Ken Griffin, has founded a new fund at Neuberger Berman. Neuberger will use the new $200 million fund to continue its expansion into alternative investment funds, shifting away from its traditional money management roots. In just two months of trading, Rotter's new fund now manages roughly $209 million in assets, and Rotter himself feels optimistic about the economic conditions to come under the Trump administration.
Principal Strategies Group
The new fund, a portion of Neuberger Berman, is called the Principal Strategies Group. Rotter divulged the fund's assets in a recent letter to clients which was picked up by Fortune online. From Rotter's letter, it's unclear how the $209 million in assets is divided up, as its possible that all of the money could be in a single hedge fund or it could be split up across a number of different accounts. Similarly, Rotter did not specify the exact returns that the new fund has seen so far in its history of trading, although he did indicate that it has been a positive return so far. By comparison, the S&P 500, which has outpaced many hedge funds across the industry once again in 2016, has gained by 5.5% during the time that Rotter's group has been trading.
New Investment Avenue
Rotter has rumoredly been at Neuberger since February of this year, according to Fortune, and the new fund is managed out of the Chicago office of the New York-based company. Previously, Rotter was working as a global head of event-driven strategies for Citadel, although the left the compny in 2008 surrounding a major loss as part of the financial crisis caused most of the event-driven team to be laid off. In 2009, Rotter founded a fund called RoundKeep Capital Advisors alongside a group of other ex-Citadel experts. RoundKeep bloomed to over $1 billion in assets, but poor performance eventually shuttered the fund's doors in 2012. Rotter returned to Citadel after that, working for two more years before departing once again in 2015.
Neuberger, famous for having been bought out of Lehman Brothers' bankruptcy, has a stable of hedge funds already, with a variety of investing strategies represented. The company has funds focusing on debt, mutual funds, individual client accounts, and more.
Rotter's letter to clients also indicated something else about the future: the investment leader is optimistic about the state of hedge funds in the months to come, thanks to the incoming Trump administration. Rotter explained, "the potential for significant regulatory and tax reform may spur a new cycle of deals," saying that they are "excited about [the] opportunity" which awaits.