Moore Capital Management LLC, the New York firm founded by Louis Moore Bacon, invested $800 million in a hedge fund begun last year by two of its former traders, according to two people with knowledge of the matter.
The investment allowed Stone Milliner Asset Management AG founders Jens-Peter Stein and Kornelius Klobucar to start trading last month with more than $1 billion, said the people, who asked not to be named because the firms are private. Moore’s assets are in a managed account, the people said.
“That’s a big number,” said Michael Rosen, chief investment officer of Angeles Investment Advisors LLC, a Santa Monica, California-based firm that helps clients invest in hedge funds. “You don’t normally see investments of that size in a startup. Having worked with the managers already, that might give the investor extra comfort.”
Moore, which manages $15 billion, has a history of investing in traders who leave the hedge fund to start their own firms. Those who received allocations in recent years include Bramshott Capital LLP’s Paul Findley and James Caird Asset Management LP’s Tim Leslie.
Todd Edgar, a former commodities trader at Barclays Plc, will start trading at his new hedge fund this year after receiving as much as $200 million from the money-management unit of Goldman Sachs Group Inc. (GS) Morgan Sze, the former head of a Goldman Sachs proprietary trading unit, started trading at his hedge fund in April with about $1 billion.
Stone Milliner is a macro hedge fund, meaning the firm invests in interest rates, currencies, bonds and stocks based on its traders’ views of global economic trends. Stein and Klobucar founded the firm, which has offices in Zug, Switzerland, and London, last year. Executives at Stone Milliner and Moore declined to comment.
Stein and Klobucar joined Moore in 2006 from Morgan Stanley. (MS) The traders produced annual investment returns of about 8 percent on average from 2006 to 2011 in the portfolio they managed at Moore, according to the people. Their best year was 2007, when they gained 15 percent. Stein and Klobucar’s portfolio rose 14 percent in 2008, which was the worst year ever for the hedge-fund industry.
All of Stone Milliner’s seven investment professionals worked at Moore, including Christopher Nicoll, Jana Benesova, Ted Wright and Dheer Mehta and Timothee Bich. The firm continues to try to raise assets, seeking minimum investments of $1 million, the people said. Like most hedge funds, Stone Milliner charges 2 percent of assets under management to cover costs plus 20 percent of any profits.
Findley and a team of European stock traders left Moore to start London-based Bramshott last year. Leslie, a bond trader, departed Moore in 2008 to start James Caird. He told investors in December he was shutting down his $1.6 billion hedge fund after suffering losses last year.
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