FrontPoint To Split From Morgan Stanley In March

Jan 24 2011 | 11:48am ET

Despite the insider-trading scandal that has cost it billions, FrontPoint Partners' spin-off from Morgan Stanley will move forward.

The split will now occur in March, co-CEO Daniel Waters told employees in a memo issued Thursday, the New York Post reports. The insider-trading scandal—which led FrontPoint to dismiss its entire healthcare team and liquidate its healthcare hedge funds—did force the hedge fund to renegotiate and revise the terms of the spin-off, Waters said.

Morgan Stanley and FrontPoint first reached a deal to split in October. The following month, a French doctor was arrested and accused of passing confidential information on to a hedge fund, later identified as FrontPoint. In the wake of the arrest, FrontPoint saw its assets under management plummet from $7 billion to $4.5 billion, although they have rebounded somewhat.

It is unclear what the new terms of the spin-off are. Under the original plan, Morgan Stanley was to retain a sizeable stake in FrontPoint and a share of its profits for up to five years at it sought to recoup the $400 million it paid for the firm five years ago. At the time, Morgan Stanley said the spin-off would cost it $70 million, but last week revealed that it was taking a $126 million charge.


In Depth

JOBS Act Propels Real-Estate Crowdfunding Platform

Oct 21 2014 | 2:57am ET

If D.J. Paul were a real estate development, he would be described as “multi-use...

Lifestyle

Balyasny Pays Over $6M For Lakefront House

Oct 22 2014 | 10:29am ET

A venture headed by hedge fund manager Dmitry Balyasny just paid $6.2 million for...

Guest Contributor

Hedge Funds Weather A Data Management Perfect Storm

Oct 22 2014 | 12:28pm ET

From a regulatory standpoint, nearly every development since the crisis has placed...

 

Videos

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

October 2014 Cover

Deeply flawed risk benchmark

Most traders agree that proper risk management is the key to successful trading. However, many traders depend on the deeply flawed measure of standard deviation as a benchmark of risk. Here we put it ...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.