Diamondback Co-Founder Plans Fourth-Quarter Return

Sep 17 2013 | 2:09pm ET

Richard Schimel, the co-founder of Diamondback Capital Management and SAC Capital Management chief Steven Cohen's brother-in-law, is returning to the hedge fund industry later this year.

Schimel's New York-based Sterling Ridge Capital Management will beat Diamondback co-founder Lawrence Sapanski back to market with the fourth-quarter debut; Sapanski's Scoria Capital Partners is set to debut in the first quarter of next year. The two men shuttered Diamondback in December, more than two years after it was raided by the Federal Bureau of Investigation as part of an insider-trading probe.

Neither Sapanski nor Schimel was ever accused of wrongdoing, although former Diamondback portfolio manager Todd Newman was convicted of fraud. Diamondback was the last of the four hedge funds raided in 2010 to survive, although redemptions had cut the fund's assets to $520 million from $5.8 billion.

Schimel, in a letter to potential investors today obtained by Reuters, said he was excited to return to money-management.

"The investment model at Sterling Ridge will focus on a single integrated portfolio that I will manage, similar to what I did in the main portfolio at Diamondback," Schimel wrote.

Prior to founding Diamondback in 2005, Schimel and Sapanski worked at SAC.

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