Julie Creswell reports today in The New York Times that veteran hedge fund manager Jim Pallotta is returning to the market. Guess he was tired of being a full-time, part-owner of the Celtics. Credit to Julie for the scoop, and now let me try to (belatedly) flesh it out a bit more:
Pallotta made his bones running the Raptor long/short funds for Tudor Investment Corp., where his compounded rate of return was around 19.2 percent. He spun out of Tudor in early 2008, after a disagreement with Paul Tudor Jones over lockup period rules (among other things). It was a fairly amicable split, considering that Pallotta got to keep the Raptor name and remains Tudor’s second-largest shareholder.
Raptor was officially wound down a few months later, but Pallotta now is returning with what basically resembles a fund-of-funds for emerging hedge fund managers. Pallotta was known for giving young traders their own desks while at Tudor, and this is really an extension of that strategy.
The boss has contributed a couple hundred million dollars of his own money, and now is on the prowl for third-party commitments. I’d expect that he’ll pitch to institutional investors, but a source tells me that he’s also using Forbes Private Capital to make introductions to select high-net-worth individuals.