(Bloomberg) -- Schonfeld Strategic Advisors allocated $5 billion for a new macro trading unit that will debut next week to take on hedge fund giants including Citadel and Brevan Howard Asset Management.
The new group is led by industry veterans Colin Lancaster and Mitesh Parikh and the initial commitment includes leverage, according to a person with knowledge of the matter. The unit will start with 10 portfolio managers and use Schonfeld’s platform to build out the business, said the person, who asked not to be identified because the information is private.
The money managers include former Balyasny ’s Farouk Juma, who came out of retirement to join the venture, as well as Andrew Poray, who will be based in Miami. Among the other hires: Former Citadel macro trader Amu Latif, Daniel Stewart from GIC Asset Management, Manas Baveja, who comes from Balyasny, and Dev Sahai from Maniyar Capital. Jaime Villa will run research in London.
A spokeswoman for New York-based Schonfeld declined to comment.
Schonfeld is jumping into the highly competitive macro trading world following mixed returns by peers last year. Veterans such as Chris Rokos and Alphadyne Asset Management suffered record losses yet Greg Coffey traded his way to a 23% surge. Macro hedge funds on average gained a modest 6%, according to data compiled by Bloomberg.
Appetite for macro strategies remains strong as central banks roll back quantitative easing and raise interest rates in response to spiraling inflation, providing ample trading opportunities. Despite his losses, Rokos raised $1 billion earlier this month, while Coffey’s assets have jumped to $4 billion.
Multi-strategy investment firm Schonfeld recently hired Lancaster and Parikh to branch into the macro trading business and are on a hiring spree by dangling a hefty cut of profits to lure traders. The firm is also looking to hire credit and commodities traders and money managers in Asia, the person said.
The firm manages about $11 billion in third-party assets and aims to deploy $8 billion including leverage for the macro unit. Schonfeld’s Strategic Partners fund was up 14% last year, while its Fundamental Equity fund gained 7.4%.
©2022 Bloomberg L.P.