Ex-Deutsche Bank’s Lehr Said to Start New York Hedge FundRodrigo Orihuela
Hal Lehr, a former Deutsche Bank AG and Soros Fund Management LLC trader, received backing from JPMorgan Chase & Co.’s asset management unit to start a New York hedge-fund firm, a person with knowledge of the matter said.
The firm, to be named Aithon Capital, is scheduled to start in January with JPMorgan investing about half its initial $100 million of capital, the person said, asking not to be identified as the information is private. The global macro fund may have a focus on commodity trading and JPMorgan can boost its investment to as much as $500 million, the person said. Aithon is in talks for office space at 501 Madison Avenue, the person said.
Lehr had planned to begin Aithon after stepping down as head of Deutsche Bank’s global cross-commodity trading unit in late 2012, the person said. The start was postponed after he joined Carlyle Group as an adviser. Deutsche Bank will act as one of Aithon’s prime brokers, according to the person.
JPMorgan Asset Management Chief Investment Officer Paul Zummo declined to comment when contacted by phone, while Lehr was unavailable for comment.
The amount of capital allocated to hedge funds globally reached a record $2.8 trillion in the second quarter, according to Hedge Fund Research Inc.
BlackRock Inc., the world’s largest money manager, hired Harvard Management Co.’s Mark McKenna in June to start an event-driven hedge fund. Others raising money for such funds include Manny Singh, who was one of billionaire hedge-fund manager Julian Robertson’s two stock pickers, and former Magnetar Capital LLC money managers Min Htoo and Jordan Teramo.
The Aithon discretionary fund will seek investments based on relative value relationships among assets such as commodities, the person said. Discretionary funds allow managers to directly pick investments, as opposed to systematic funds which rely on mathematical or software models and give the investor less flexibility.
Unlike traditional money managers, hedge funds can bet on rising as well as falling prices of securities, seeking to make money in any market environment. They generally charge fees of 2 percent of assets and 20 percent of returns.
The Bloomberg Commodity Index of 22 raw materials slipped 5.6 percent this year, with brent crude down about 12 percent and iron ore at at the Qingdao port in China losing 41 percent.