Key Takeaways
- • Neil Chriss, former head of quantitative strategies at SAC Capital Advisors, launched multistrategy hedge fund Hutchin Hill Capital in September 2007 with a $1.5 billion asset base and 11 portfolio managers.
- • Hutchin Hill runs four core strategies (discretionary credit, discretionary equities, systematic and quantitative, macro) plus three opportunistic ones, executing an average of 800 trades globally each day.
- • James Simons' Meritage Fund committed a $300 million allocation at full fees (2% management fee, 15% performance fee).
- • As of April 30 (2011), Hutchin Hill's annualized return since inception was 13.82%, with a 6.46% standard deviation and a 2.03 Sharpe ratio.
Summary
Neil Chriss, a former head of quantitative strategies at Stamford, Connecticut-based SAC Capital Advisors, started his own hedge fund firm in September 2007. Despite his quantitative background, the New York-based firm, Hutchin Hill Capital, is a multistrategy shop rather than a quant fund in the vein of AQR Capital Management or Goldman Sachs Asset Management's Global Alpha. According to the original Institutional Investor profile, the firm invests across four core strategies (discretionary credit, discretionary equities, systematic and quantitative, and macro) and three opportunistic ones, including hedges and managed futures. Quantitative approaches such as statistical arbitrage, fixed-income arbitrage, relative value, and dispersion trades account for about a quarter of assets, while equity strategies range from pairs trading to event-driven investing.
Hutchin Hill has $1.5 billion in assets and 11 portfolio managers, including principal Seth Padowitz, formerly head of quantitative research at HBK Capital Management; macro manager Benjamin Heller, previously a portfolio manager at HBK; Pierre-Emmanuel Evreux, a former corporate credit trader at Citigroup and Old Lane Partners; and Shahraab Ahmad, formerly a partner and portfolio manager at Sailfish Capital Partners. The firm executes an average of 800 trades globally each day. Chriss emphasized liquidity and risk management, stating that every portfolio manager is focused on position size relative to capital, a lesson he tied to the August 2007 quant market upheaval and the 2008 crisis.
A key institutional backer is James Simons, retired founder of Renaissance Technologies. Simons invests through Meritage Fund, the fund of hedge funds that manages money for his family and Renaissance employees, which agreed to a $300 million allocation at full fees. Hutchin Hill charges a 2% management fee and a 15% performance fee, and passes through certain fund expenses. As of April 30, the fund's annualized return since inception was 13.82%, with a standard deviation of 6.46% and a Sharpe ratio of 2.03, according to the article.
Hutchin Hill has $1.5 billion in assets and 11 portfolio managers, including principal Seth Padowitz, formerly head of quantitative research at HBK Capital Management; macro manager Benjamin Heller, previously a portfolio manager at HBK; Pierre-Emmanuel Evreux, a former corporate credit trader at Citigroup and Old Lane Partners; and Shahraab Ahmad, formerly a partner and portfolio manager at Sailfish Capital Partners. The firm executes an average of 800 trades globally each day. Chriss emphasized liquidity and risk management, stating that every portfolio manager is focused on position size relative to capital, a lesson he tied to the August 2007 quant market upheaval and the 2008 crisis.
A key institutional backer is James Simons, retired founder of Renaissance Technologies. Simons invests through Meritage Fund, the fund of hedge funds that manages money for his family and Renaissance employees, which agreed to a $300 million allocation at full fees. Hutchin Hill charges a 2% management fee and a 15% performance fee, and passes through certain fund expenses. As of April 30, the fund's annualized return since inception was 13.82%, with a standard deviation of 6.46% and a Sharpe ratio of 2.03, according to the article.
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