|| S. Donald Sussman (Bloomberg)
Paloma Partners has made a new commitment to back a
fledgling hedge fund.
The Greenwich, Connecticut–based firm, founded in
Sussman, has agreed to back Rhodium Capital, a long-short
European credit focused fund founded late last year by Iftikhar
Ali and Jeffrey Tirman. The London-based fund is said to take a
fundamental and relative value approach.
Paloma is known for backing emerging hedge funds, which then
exclusively work for Paloma. Last year Alpha named
Sussman to its Hedge Fund Hall of Fame.
Ali, who serves as chief investment officer, has more than
20 years experience in the corporate credit area, most recently
at Observatory Capital. He previously worked at Israel
Englander’s Millennium Management. He is also a
former head of international proprietary trading at Bank of
America in London. Tirman, who serves as chief executive
officer and chief risk officer, was the founder and portfolio
manager of Switzerland-based Talisman Capital.
Rhodium, which will continue to be based in London, will
manage money for Paloma in a managed account structure. Paloma
currently has more than 20 trading teams.
Sussman is a pioneer in the hedge fund industry. He was
among the first to identify and then farm out money to unknown
managers rather than invest the capital himself. Eventually,
Sussman moved away from investing in outside managers to hiring
undiscovered managers to trade on Paloma’s
centralized platform. The approach has worked well. From
October 1981 through July 2013, Paloma Partners, which manages
about $2 billion, produced an annualized return of nearly 13
percent. It gained nearly 16 percent last year.
Over the years, Sussman has been credited with making early
investments in some of the industry’s most
legendary firms. These include David Shaw’s D.E.
Shaw, Bruce Kovner’s Caxton Associates, Edward
Thorp’s Princeton/Newport Partners, Paul
Singer’s Elliott Management Corp., Alan
Slifka’s Halcyon Asset Management and John Angelo
and Michael Gordon’s Angelo, Gordon & Co.
"Our managers are still independent, but these days we
require full position transparency, immediate liquidity,
approval rights over the selection of prime brokers and
counterparties and so forth," Sussman told Alpha last