Ziff Brothers To Wind Down U.S. Hedge Fund, Seed Managers

Nov 1 2013 | 1:34pm ET

Ziff Brothers Investments has already given rise to one of the hedge fund industry's biggest firms. Now, the family office is giving up its own U.S. hedge fund operation to seed a host of new ones.

New York-based Ziff Brothers, which has about $10 billion in assets, will gradually close the hedge fund, which has been led, since 1999, by Ian McKinnon. The move was prompted by McKinnon's decision to retire in 2015.

The Ziff brothers feared turning over the operation to a less-experienced person. Instead, they'll spin-off some of the strategies run by McKinnon's sector heads, The Wall Street Journal reports. Ziff Brothers will retain the office's London-based hedge fund operation, which could get some of the capital currently managed by McKinnon's group.

Between 300 and 400 people work at Ziff Brothers' U.S. hedge fund business, according to the Journal.

Among those expected to strike out on their own with some of the Ziff fortune are technology trader Eli Cohen, industrials trader Parag Pande and financials trader Ryan Pedlow. Ziff Brothers has already spun off its commodities business, as off Oct. 1 called Cmdty, and its long/short credit strategy, which will debut on Jan. 1 as Chimney Rock Investments. Ziff Brothers is seeding both new firms, handing $100 million to Chimney Rock and an unknown amount to Cmdty.

The former head of Ziff Brothers' hedge-fund sector, Yen Liow, is also launching a hedge fund next year, Aravt Global, although it is unclear whether Ziff Brothers will invest with it.

Ziff Brothers may also invest with additional outside managers.

The Ziff brothers have a storied history of backing big-name managers. The trio's family office seeded Och-Ziff Capital Management in 1994 and still own 10% of the now publicly-traded, $34 billion hedge fund. Ziff Brothers has also invested with ESL Investments, Perry Capital, Pershing Square Capital Management and Starwood Capital Group.


In Depth

Q&A: Open Season For Closed-End Funds

Aug 29 2014 | 10:00am ET

When Maury Fertig and Bob Huffman, former Salomon Brothers coworkers, launched...

Lifestyle

Och Funds Women In Finance Initiative At U-M

Aug 28 2014 | 3:01pm ET

Och-Ziff Capital founder Daniel Och and his wife have made a "generous donation"...

Guest Contributor

Looking Ahead: What’s In Store For Managed Futures?

Aug 22 2014 | 12:52pm ET

The last five years were phenomenal for investors in equity indices. Will the next...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

July/August 2014 Cover

The time was right

Commodities/Futures magazine launched at the precipice of a revolution in the futures industry—really a revolution in the idea of risk management—that would move it from a small niche industry to ...

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.