Former Engineers Launch Quant. Hedge Fund

Mar 12 2008 | 2:00am ET

A pair of engineers from Lockheed Martin and General Motors are parlaying their technical know-how into a quantitative hedge fund that they hope will translate into big returns.

Andrew Borden and Stephen Longo, who are based in New York and Santa Monica, Calif., have launched Solytix Capital with three risk levels: conservative, moderate and aggressive. The fund combines long/short equity options and spreads positions in the Standard & Poor’s 500 Volatility Index and Russell 2000 Index, and exchange-traded funds and individual U.S. stocks with long-only positions in Dow 30 names. Its holding period ranges from one day to a few weeks.

The hedge fund rookies are banking on their strategy and prior trading experience–Longo traded his own account for years after leaving General Motors, and Borden spent 17 years in the risk management, trading and investment banking divisions at Merrill Lynch, Morgan Stanley and Goldman Sachs–to offset their lack of experience in the hedge fund space.

“We have a lot of experience in trading and risk management, so our having no experiences with hedge funds doesn’t deter us because the markets can be approached any infinite number of ways, and our intention is to not approach them the same way as others have,” said Longo.

“Our capital leverage ratio is considerably less than one, so we go in using our options, spreads and timing and we grab and get out, grab and get out. So any one time we’re sticking our dollars in the market, the worst case scenario is that it won’t kill us.”

The pair is currently marketing the fund to individuals and fund of funds via its own networks and cap intros from its prime broker, Shoreline Trading Group.

The fund charges a 3% management fee and a 20% incentive fee with a $1 million minimum investment requirement.


In Depth

Kettera Q&A: The Advantages of Alternative Investment Platforms

Oct 28 2016 | 5:52pm ET

The past several years have seen a distinct push towards easier and cheaper access...

Lifestyle

Midtown's Plaza District Fades As Manhattan Office Landscape Shifts

Nov 22 2016 | 6:32pm ET

Lower leasing costs, more efficient office space and the hope of projecting an image...

Guest Contributor

Nowhere to Hide: Why the Future of Asset Management Depends on Innovation

Nov 15 2016 | 6:55pm ET

Information technology has reshaped the asset management industry’s periphery,...

 

From the current issue of

Chicago-based independent futures brokerage and clearing firm R.J. O’Brien & Associates (RJO) has hired industry veteran Daniel Staniford as Executive Director, responsible for the firm’s institutional business development in New York and London.

AVAILABLE NOW at BARNES & NOBLE

NEWSTAND LOCATOR