New York-based systematic trading firm Horton Point is trying its hand at the seeding business.
The firm is raising a private equity fund—the Soundview Emerging Managers Fund I—to serve as a seeding vehicle for a number of systematic traders.
“We see large numbers of deeply experienced talented quantitative traders being displaced from large firms,” said Horton Point CEO and co-founder Dimitri Sogoloff in a statement.
“Many are eager to set up their own shops. Their alpha-generation skills are very appealing, but they lack other ingredients necessary to build a successful hedge fund organization. We feel we are uniquely positioned to help them in this process.”
Horton Point will provide start-up managers with capital as well as operational, risk management, compliance and marketing infrastructure.
“We are practitioners of systematic trading and have built a robust infrastructure to serve our own needs. It’s been battle-tested since 2007 and has significant excess capacity to take on select outside managers,” said Sogoloff. Managers will also gain access to some of Horton's own staff, including its COO, chief risk officer and a business development professional.
Horton has its eye on some likely candidates for the new seeding platform and has begun negotiating terms. The private equity fund will launch early next year and will focus exclusively on short-term systematic managers with limited capacity.
Horton Point offered no further details on the fund terms, saying only that it will offer “very competitive fees” and provide investors with “significant minority interests in the underlying managers.”
Horton Point was launched in 2006 as a family office.