Tudor Investment Corp., the $11.6 billion hedge fund that seeks to profit from macroeconomic events, is planning its first equity funds since stock manager James Pallotta left the firm in 2009, according to four people with knowledge of the matter.
Tudor may offer two equity funds to clients next year, one of which would be based on the performance of a number of portfolio managers focused on different industries, said the people, who asked not to be named because the plans are private. Tudor is in the early stages of planning, and may decide to shelve the funds, the people said. Patrick Clifford, a spokesman for Greenwich, Connecticut-based Tudor, declined to comment.
The firm, founded by billionaire Paul Tudor Jones, started its Raptor Global equity fund in 1993 that was run by Jones’ longtime partner Pallotta and was once Tudor’s largest. Pallotta, who owns a stake in the Boston Celtics professional basketball team, at his peak managed as much as $11 billion at Tudor. He spun out Raptor in 2009 to start his own firm and closed the fund within six months.
While Tudor has sought to build up an equity business since 2010 and hired stock teams for the effort, it has had recent departures. Larry Petrella, a director of U.S. equities who previously worked at Diamondback Capital Management LLC, quit Tudor in January after two years, Hedge Fund Alert reported last month. Tudor cut back on its Asian equity trading, resulting in the departures of Singapore-based portfolio managers including Allen Chu and Ashwin Ranganathan last month.
One of the new equity funds that Tudor is planning is similar to a macro fund that the firm opened last year with $500 million. The Tudor Discretionary Macro fund is based on the performance of 14 teams of macro portfolio managers, investors briefed on the matter said in July.
Two of the managers that worked together in a team, Michael Georgiou and Miguel Mayo, have since left, according to two people with knowledge of the matter. The Tudor Discretionary Macro fund now manages about $830 million and is made up of 15 teams, another person said.
The macro fund and the planned equity fund may help in succession planning for Jones, who started Tudor in the 1980s. Jones, 58, has told investors that he has no immediate plans to retire and that he sees many compelling market opportunities over the next four or five years that will keep him trading.
Tudor’s main fund returned 6.3 percent last year and gained 4.3 percent in January, a person said last month. Macro funds gained 1.4 percent in January and lost 0.8 percent in 2012, according to data compiled by Bloomberg.
Pallotta spun off Raptor with about $1.5 billion after losses in 2007 and 2008 spurred client withdrawals. He had posted an average annual return of about 19 percent from 1993 to 2006.