Charles Simonian, a former portfolio manager at SAC Capital Advisors LP’s Sigma Capital unit, plans to start a long-short equity hedge fund, according to a person with knowledge of the matter.
Simonian, 41, will open New York-based Trove Capital Management LLC in March or April, said the person, who asked not to be identified because the information isn’t public. The fund will focus on industrial, consumer, media, telecommunications and business-services stocks with market capitalizations of $1 billion or more, and its capacity for assets is at least $1 billion, the person said.
Simonian confirmed the start of his fund. Long-short equity managers can bet on and against stocks.
Simonian joined SAC’s Sigma Capital unit in 2008 and left in September, the person said. At SAC, the Stamford, Connecticut-based hedge fund run by Steven A. Cohen, Simonian invested in the same industries his new fund will target, the person said. Josh Fischer, 42, a former portfolio manager at SAC from 2008 to 2010 who also traded in industrials, consumer, media and telecommunications stocks, will join Simonian at Trove Capital as director of research, the person said. Simonian has also hired a chief financial officer and may add one or two analysts.
Prior to SAC, Simonian was founder and portfolio manager of Exton Capital Management LLC, a hedge fund that invested in the same areas he’ll focus on at Trove Capital, from 2005 to 2007, the person said. Before that, Simonian was a partner and portfolio manager at Gracie Capital LLC from 1999 to 2004. From 1996 to 1998, he was a vice president at Atticus Capital LLC. He started his career as a merger and acquisitions investment banking analyst at Gleacher & Co. from 1994 to 1996.
Trove Capital’s prime brokers are Goldman Sachs Group Inc. (GS) and JPMorgan Chase & Co. (JPM) and the fund will have a one-year soft lock-up period, the person said. In a soft lock-up period, investors can usually take out their money before the term finishes if they pay a redemption fee.
The U.S. Securities and Exchange Commission told SAC in November it is considering pursuing civil fraud claims related to alleged insider trading in two drugmakers. The investigation marks the first time government officials linked Cohen, 56, to trades at the center of an insider-trading case, as part of their multiyear probe into the hedge fund industry. Cohen hasn’t been charged with any wrongdoing.
SAC has told portfolio managers it will raise their bonuses by 3 percentage points to help retain employees amid the probe by regulators, a person familiar with the matter said last week. The managers are typically paid an annual bonus of about 15 percent to 25 percent of the profits they generate from their trades, another person said.
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