Tudor Said to Open First Macro Hedge Fund in Decade
Tudor Investment Corp. opened a $500 million hedge fund, its first new fund to bet on macroeconomic trends in a decade, according to four investors briefed on the matter.
Founder Paul Tudor Jones won’t be among the 14 portfolio managers of the Tudor Discretionary Macro Portfolios, which was seeded with $150 million from the firm, said the people, who asked not to be named because the information is private. Jones oversees two other funds, including the main Tudor BVI Global, which has $9 billion in assets.
Tudor’s new offering will allow the managers, some of whom have been at the Greenwich, Connecticut-based firm for more than 20 years, to increase the amount of money they oversee as funds that wager on macroeconomic events have attracted investors this year. The firm’s flagship Tudor BVI Global has limited client deposits since 2010 so that its performance isn’t hindered, the investors said.
“The advantage of a multimanager fund is you have a wide disparity of styles, but you aren’t overly reliant on any one person for returns,” said Stewart Massey, chief investment officer at Massey Quick & Co., in Morristown, New Jersey, which invests in hedge funds.
Shawn Pattison, a spokesman for Tudor, declined to comment on the new fund. Tudor manages $11.4 billion in assets.
In addition to attracting new capital to the firm, the fund could also help in succession planning for Jones, who started Tudor in 1984. Jones, 57, has told investors that he has no plans to retire and that he sees many compelling market opportunities over the next four or five years that will keep him trading.
Jones will serve as chairman of the fund and sit on its seven-person investment committee, which includes Spencer Lampert, who has worked at Tudor for 24 years, and Bjorn Nielsen, who joined the firm 23 years ago. The other managers on the committee are Andrew Bound, Adam Grunfeld, Richard Jackson and Aadarsh Malde, the investors said.
Macro funds have been among the big draws so far in 2012, pulling in $7.8 billion of the $16.3 billion that hedge funds attracted in the first three months of the year, according to data compiled by Chicago-based Hedge Fund Research Inc.
While investors expect these funds to benefit from the big macroeconomic events such as the European sovereign debt crisis, macro funds, on average, have returned just 1.5 percent in the first five months of the year, according to Hedge Fund Research.
Tudor BVI has returned about 2 percent this year through June 22, and has produced average annual returns of 21 percent since the fund started in 1986, according to the investors.
Jones started his career in 1976, after graduating from the University of Virginia with a bachelor’s degree in economics. Through his uncle Billy Dunavant, a cotton merchandiser, he got a job as a trader on the floor of the New York Cotton Exchange. From there, Jones became a commodities broker at E.F. Hutton & Co., trading futures on the cotton exchange for clients before starting Tudor.