After months of waiting for a non-compete clause to expire, two-former executives from Graham Capital Management are launching their first hedge fund on July 1.
Brian Aldershof, former v.p. and director of risk management at Graham Capital, and Cox Owen, a former trader at the firm, teamed up to establish asset management firm Easton Bay Capital. The firm's first fund, the Easton Bay Capital Ranger Fund, will be a trend following vehicle that will trade futures con-tracts across all liquid sectors in Europe, Asia and the U.S. The firm will also provide separately managed accounts.
"There are tons and tons of non-scalable strategies, we are not interested in those," said Aldershof, who added that trading will begin as soon as the fund gains regulatory approval and has $20million in assets under management, which he expects to happen in the coming months.
Owen and Aldershof left Graham Capital more than a year ago and ever since they have been busy battling a lawsuit with their former employer concerning intellectual property.
Graham Capital —a multi-billion dollar alternative asset management firm founded in 1994 by Kenneth Tropin —filed suit against Aldershof and Owen accusing them of utilizing software that Aldershof created for the firm. Aldershof, who has a PhD in statistics, refuted the claims, saying that he created a completely different proprietary software program. The case has been settled and an agreement worked out.
In addition to the non-compete clause, which has expired, part of the settlement granted Graham Capital the right to send an auditor to monitor the software at Easton Bay. According to Aldershof, the auditor agreed that the software was indeed different than the software being used at Graham Capital.
Tropin did not return calls seeking comment.
Owen and Aldershof do not relish the experience of being sued by their former employer, but they said they used the time constructively to work on building up back office operations and back testing their trading strategy with Aldershof's new soft-ware. They both also wish their former employer well.
"We really hope Graham is a successful place, we have a great respect for Ken and we wish him the best of luck," said Owen.
The minimum investment in the new fund is $1 million and fees are 2% for management and 20% for performance. The separately managed accounts will have a minimum investment of$5 million. The firm is mainly targeting institutional investors.