Highbridge Vet Launches Quant Equities Fund

Nov 19 2013 | 1:40pm ET

Highbridge Capital vet Edward Tolson is launching his own hedge fund.

Blue Basin Capital, an algorithmic long/short equity strategy focused on stocks with daily trading volume less than $10 million, will begin operation on January 1.

Tolson was at Highbridge Capital, the JPM-owned hedge fund, from 2003 to 2012, serving as managing director of equity trading technology. Prior to that, he was a founding team member at Intelligent Trading Desk.

Tolson told FINalternatives he expects to launch with $10 million but will limit the size of the New York-based fund to $25 million:

“I saw first-hand the trend of the past several years of capital concentration at the largest managers, to the direct detriment of fund performance,” Tolson said in an email. “With that backdrop and the mediocre performance that's resulted at many of the largest managers, I thought this was the perfect opportunity to deploy a fund with a dramatic capacity limitation but the ability to deliver a truly exceptional return profile.

“Price movements in these stocks are heavily driven by short-term supply and demand dynamics, creating very attractive investment opportunities for algorithmic strategies. However, large quant funds ignore this universe because it's infeasible to quickly build multi-million dollar positions.”

By limiting the fund size, Blue Basin seeks to capitalize on these capacity-constrained opportunities, and deliver a Sharpe ratio over 3.  

Blue Basin employs five people in full and part-time capacities and charges standard 2 and 20 fees.

 

 


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

Strippers Accused Of Robbing Hedge-Fund Manager Face Jail

Oct 20 2014 | 9:20am ET

A group of alleged stripper-thieves—whose victims include a hedge-fund manager...

Guest Contributor

PAAMCO: European Equity Exposure - Challenging Year, But All is Not Lost

Oct 16 2014 | 4:12am ET

European equity hedge fund managers have had a tough time so far this year. The...

 

Videos

Editor's Note

    Must Attend Hedge Fund Charity Events For October

    Sep 30 2014 | 9:29am ET

    The crisp Autumnal days of October are upon us, and so are a few of the hedge fund industry’s favorite charitable events. If you have never been to Rocktoberfest, well, you are missing out. And for a quieter evening of sipping and socializing, stop by HFC’s Wine Soiree. 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.