Garry Collins is out at Bank of America after a little more than two years at the firm, and is returning to his former professional home: Credit Suisse.

Collins, the bank's head of capital introduction, left the firm Monday afternoon, several sources tell Insider. In his role on the prime brokerage team, he connected wealthy and institutional clients with investment managers like hedge funds looking to raise capital. 

Prior to joining Bank of America, Collins worked for Credit Suisse for more than a decade, according to his LinkedIn page. He will return to the Swiss firm where he will work on hedge fund origination under Alex Englander, head of equity sales in the Americas, according to a source familiar with the situation.

Collins did not immediately return requests for comment from Insider.

Bank of America's prime brokerage unit had several top people leave in 2018 following the dismissal of Omeed Malik, the former head of the team, for what the bank characterized as harassment. Malik was a rising star at the time, and departures in 2018 included directors Michael Dolan and Kristin Maule and managing director Chris Throop.

Malik sued Bank of America for defamation and discrimination, and received an undisclosed, multi-million-dollar settlement from the bank. 

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• Ray Dalio's bubble indicator suggests the US stock market isn't dangerously high.
• However, it found that 5% of the top 1,000 US companies are in "extreme bubbles."
• It also identified froth in stock prices, new buyers, bullishness, and use of leverage.
• Visit the Business section of Insider for more stories.

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Ray Dalio's bubble indicator suggests US stocks aren't trading at unsustainable prices and could climb higher.

The billionaire co-chief of the world's largest hedge fund, Bridgewater Associates, said in a research note this month that his market gauge is at the 77th percentile for the overall US stock market. Its readings for the bubbles in the 1920s and 1990s are in the 100th percentile.

However, Dalio noted that 5% of the top 1,000 US companies — including several emerging-technology players — are currently in "extreme bubbles." Still, that's less than half of the percentage at the height of the dot-com boom.

Dalio's bubble indicator combines six measures of the stock market. They are: 

• How high are prices relative to traditional measures?
• Are prices discounting unsustainable conditions?
• How many new buyers have entered the market?
• How broadly bullish is sentiment?
• Are purchases being financed by high leverage?
• Have buyers made exceptionally extended forward purchases to speculate or protect themselves against future price gains?

The Bridgewater chief's gauge shows US stocks are priced in the 82nd percentile on traditional metrics, and the 77th percentile in terms of the earnings growth required to outperform bonds.

Its reading for new buyers is in the 95th percentile, largely due to the boom in retail investing. Bullishness is in the 85th percentile, partly due to the "exceptionally hot" IPO market, which has been supercharged by a flood of special-purpose acquisition companies or "SPACs."

Dalio's yardstick found that leveraged purchases, fueled by day traders snapping up record volumes of call options on single stocks, are in the 79th percentile.

In contrast, forward purchases are in the 15th percentile — compared to the 100th percentile in the late 1990s — as the pandemic has depressed corporate investment and weighed on the number of mergers and acquisitions.

The hedge-fund billionaire's indicator is flagging some froth in stocks. However, it's positively optimistic compared to Warren Buffett's favorite gauge and "The Big Short" investor Michael Burry's recent warning that the stock market is "dancing on a knife's edge."

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Three top executives from hedge fund Elliott Management are putting their multimillion-dollar New York apartments on the market. 

According to a report from The Wall Street Journal's Katherine Clarke and Cara Lombardo, the three luxury properties are being listed for sale amid a migration to Florida among Wall Street firms and executives. Insider's Daniel Geiger and Alex Nicoll reported in January that Elliott Management was close to signing a deal to move into a 40,000-square-foot office building in West Palm Beach, and Goldman Sachs, Blackstone, and Citadel are also reportedly planning moves to the Sunshine State. 

Wall Street luminaries like Carl Icahn and Charles Schwab have also relocated from New York to Florida, and in January, hedge-fund billionaire Dan Loeb purchased a mansion in Miami Beach for $20 million. Earlier this month, the Journal reported that David Tepper is reportedly planning to buy a $73 million mansion in Palm Beach. 

The properties now up for sale in New York include a $40 million apartment, which the Journal reports belongs to Elliott's founder, Paul Singer. The roughly 7,500-square-foot apartment has five bedrooms and six bathrooms and is located on New York's Upper West Side. Singer plans to leave New York City but continue to live in the Northeast, the Journal reports.

Elliott's co-CEO, Jonathan Pollock, is living in South Florida and is also selling his Upper West Side home, the Journal reports. The listing includes two adjacent apartments, which are listed for a combined $25 million. They span approximately 8,373 square feet and, combined, have seven bedrooms and a total of nine bathrooms. 

And Elliott partner Jesse Cohn, who led the attempt last year to oust Twitter CEO Jack Dorsey and now sits on Twitter's board, is selling his New York apartment as well and plans to move to West Palm Beach, according to to the Journal. 

A spokesperson for Elliott declined to comment. 

Cohn's apartment, which spans 6,000 square feet, is being listed by Compass for $39.5 million. Take a look inside. 

Cohn's penthouse apartment is located inside the Four Seasons in the TriBeCa neighborhood of New York City.

It offers panoramic views of Manhattan and has a terrace that runs the full width of the building.

The living room has 12-foot-high ceilings and a gas fireplace encased in marble.

There's a private study ...

... a dining room ...

... and an eat-in kitchen.

The kitchen has professional-grade appliances and a butler's pantry.

While there's a staircase that leads to the upper levels, they can also be accessed via a private elevator.

The master bedroom has a fireplace and a wall of windows ...

... a private dressing room with space to work or lounge ...

... and a bathroom complete with a soaking tub.

The playroom has its own small kitchen, as well as an adjacent bedroom for a nanny.

There are five bedrooms total, as well as a separate, one-bedroom apartment on another floor, which the listing says could be used as a guest suite or private office.

The building itself includes a 24-hour doorman, concierge, on-site gym, 75-foot pool, parking garage, and full-service salon and spa.

Long-serving Maverick Capital executive Andrew Warford is leaving the $9 billion hedge fund. 

Warford, chairman of the firm's stock committee and de facto head of the fund, is departing after 18 years, according to sources familiar with the matter. 

Warford holds a sizable economic interest in the fund — he has a stake of at least 25% of the firm, according to regulatory filings. Sources tell Insider he will run his family office from Minnesota.

A Maverick Capital spokesman declined to comment beyond saying that Warford is still a partner at the fund. Warford did not immediately respond to requests for comment.

Lee Ainslie, Maverick's billionaire founder, hired Warford away from Viking Global in 2003 as his technology sector head after suffering a rash of departures, according to an article from Institutional Investor.

In the ensuing years, Warford was a top performer and ascended the ranks at Maverick. He was tapped to head up the stock committee in 2012 and became a managing partner in 2013 as Ainslie gradually stepped back and delegated more power.

Warford oversaw investment and trading decisions in the firm's largest funds as well as the team of five sector heads that had final say over the stocks in the firm's portfolios. 

Maverick bested the average hedge fund last year, with a 15.8% performance for 2020, and saw a big opportunity following the GameStop-fueled market volatility wrought by Reddit-reading retail traders. Ainslie told investors earlier this month in a letter that the firm believes "that we are poised to take advantage of the incredible long and short opportunities that have been created by this hedge fund unwind."

SEE ALSO: Billionaire Lee Ainslie is telling investors that his $9 billion Maverick Capital is 'poised to take advantage' of the post-GameStop-frenzy market

SEE ALSO: Citadel poaches a rising star from billionaire Lee Ainslie's Maverick Capital to join its Ashler stock-picking unit

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Zach Kurz, a former Forbes' 30 under 30 member and deputy CIO for PointState, is starting his own hedge fund, sources tell Insider.

The new firm will be called Pinnbrook Capital, and is expected to start trading April 1 with $500 million. Sources told Insider the new firm has an anchor investor that is pumping in roughly half of the firm's starting capital.

Kurz is another big name to leave PointState. He took over the responsibilities of PointState cofounder Josh Samuelson when he left the firm in late 2019. Samuelson and Zachary Schreiber, two disciples of billionaire investor Stanley Druckenmiller, founded PointState in 2011 along with five other former Duquesne staffers, including Kurz who worked for Druckenmiller as analyst for a year after a year in Morgan Stanley's investment banking program.  

Pinnbrook Capital will be based in New York, and is the second significant launch to come from a PointState alum in the last 12 months, following Scott Balkan's FourSixThree Capital, which was announced last year. Balkan had been the head of credit at PointState, and is expected to raise $1 billion for his new fund, including money from Leucadia Asset Management. 

Pinnbrook's team is already deep despite its early days. Tom Dwan, who has been the chief operating officer of several hedge funds including Paul Touradji's fund, will be the COO, sources said. Other members of the team include former Scoggin Capital portfolio manager Jared Lubetkin as the head of equities and former MSD capital analyst Jerome Khohayting as the head of technology, media, and telecomm investing. 

Kurz did not respond to requests for comment. PointState could not be reached for comment. 

SEE ALSO: Maverick Capital's top stock-picker Andrew Warford is leaving the $9 billion fund to run his own family office

SEE ALSO: A former WorldQuant exec and Jefferies trader are launching a quant fund with a $1 billion portfolio. Here's how they're planning to avoid the pain that hit their peers in 2020.

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Special-purpose acquisition companies are one of the hottest investing trends right now. SPAC launches more than tripled in 2020 compared to 2019. And roughly five SPACs have gone public every trading day this year, according to a recent analysis by Goldman Sachs.

Everyone from retail investors to celebrities and sports stars is jumping on the SPACs bandwagon.

Hedge funds are betting big on SPACs. Insider recently published a list of the 15 most popular SPACs among hedge funds according to Goldman Sachs.

Legendary investor Bill Ackman's $5.8 billion Pershing Square Tontine Holdings (PSTH) took top position in the list.

According to Bloomberg data, 57 hedge funds have handed Ackman a combined $800 million plus for his SPAC. This is slightly higher than the listed 37 from Goldman Sachs.

A spokesperson for Goldman Sachs said they restrict their hedge fund universe to US funds with between 10 and 200 distinct equity positions in an attempt to isolate fundamentally driven equity investors from quant funds and other strategies.

SPACs are formed by a group of investors to buy an existing private company and take it public within a set timeframe. The money is held in a trust until a target is found. If there is no deal in that time, investors get their money back, plus interest, and can keep any corresponding warrants.

Each SPAC share usually costs $10 and comes with a warrant, or a fraction of a warrant, which gives the option to buy more shares in the future at a set price.

These warrants are where the arbitrage opportunities are. Bank of America cross-asset strategy analyst Michael Carrier described the strategy in a February 19 research note.

"To illustrate, take the perspective of a hedge fund that purchased units during the SPAC's IPO. If the share price pops in response to the deal announcement, the hedge fund can sell its shares for a gain, but if the share price declines below the IPO price, it can redeem for its share of the cash in the trust account regardless," Carrier said. "It can keep the warrants to retain exposure to the new company at no cost, allowing for potential upside with no downside risk."

Tontine Holdings, which launched last July at $20 a share, is an interesting top choice amongst hedge funds as its structure is specifically designed to limit arbitrage and encourage long-term investing.

Each unit of Ackman's SPAC comprises one share of common stock, one-ninth of a redeemable warrant exercisable at $23 and two-ninths of a warrant exercisable at $23, provided they are not redeemed in connection with a proposed merger.

The two-ninths warrant is unique because it's not detachable, meaning investors don't receive these two-ninths warrants if they redeem their shares prior to the closing of an acquisition.

When shareholders redeem shares, their warrants are distributed to the remaining investors. This links to the name, Tontine — a 17th century investment plan in which each investor pays an agreed sum into a fund and receives periodic payouts. When one of those investors dies, their payment goes to the other participants.

The compensation plan for Ackman's SPAC is also different. Sponsors usually receive 20% of the shares regardless of whether the shares in the company increase or decline. Tontine Holdings flipped that. Pershing Square Capital Management will not receive any compensation until after the shareholders receive a 20% return.

So far, Ackman has not announced a candidate for Tontine Holdings.

Insider breaks down the top 20 US hedge funds backing Tontine Holdings based on Bloomberg and WhaleWisdom data:

1. Baupost Group LLC

Baupost Group is a hedge fund based out of Boston, Massachusetts.

Founders: Seth Klarman

Assets under management: Roughly $30 billion

Shares held: 12,707,924

Market value: $352 million

Sources: SEC 13F December 31, 2020 filing, Bloomberg, Whale Wisdom

2. Soroban Capital Partners

Soroban Capital Partners is a New York based hedge fund.

Founders: Eric Mandelblatt, Gaurav Kapadia, and Scott Friedman 

Assets under management: $10.4 billion (as of September 11, 2020)

Shares held: 5,063,789

Market value: $140 million

Sources: SEC 13F December 31, 2020 filing, Bloomberg,Whale Wisdom

3. Millennium Management

Millennium Management is an investment management firm with a multi strategy hedge fund approach based out of New York.

Founder: Israel Englander

Assets under management: $47 billion 

Shares held:  2,816,035

Market value: $78 million

Sources: SEC 13F December 31, 2020 filing, Bloomberg, Whale Wisdom

4. Greenhouse Funds LLP

Greenhouse Funds is a fund manager operating out of Baltimore, Maryland

Founders: Joseph Milano

Assets under management: $695 million (as of March 30, 2020)

Shares held: 1,500,000

Market value: $42 million

Sources: SEC 13F December 31, 2020 filing, Bloomberg,Whale Wisdom

5. Taconic Capital

Taconic Capital is an institutional investment firm that pursues an event-driven, multi-strategy investment approach based out of New York.

Founders: Frank Brosens and Ken Brody

Assets under management: $9.7 billion (as of March 30, 2020)

Shares held:  1,112,300

Market value: $31 million

Sources: SEC 13F December 31, 2020 filing, Bloomberg, Whale Wisdom

6. Locust Wood Capital Advisors

Locust Wood is an alternative asset management firm focused on opportunistic value equity investing based out of New York.

Founder: Stephen Errico

Assets under management: $1.4 billion (as of June 25, 2020)

Shares held: 1,110,554

Market value: $31 million

Sources: SEC 13F December 31, 2020 filing, Bloomberg, Whale Wisdom

7. TIG Advisors

TIG Advisors is a hedge fund based in New York.

Founder: Carl Tiedemann

Assets under management: $3.7 billion (as of March 31, 2020)

Shares held: 872,019

Market value: $24 million

Sources: SEC 13F December 31, 2020 filing, Bloomberg, Whale Wisdom

8. Davidson Kempner Capital Management

Davidson Kempner Capital Management is a global institutional alternative asset management firm based out of New York City.

Founders: Marvin Davidson

Assets under management: $36 billion (as of August 13, 2020)

Shares held: 814,537

Market value: $23 million

Sources: SEC 13F December 31, 2020 filing, Bloomberg, Whale Wisdom

9. Kepos Capital LP

Kepos Capital is a New York hedge fund.

Founders: Mark Cahart, Giorgio Santis, Bob Litterman, Matt DesChamps, Simon Raykher

Assets under management: $2.7 billion (as of December 23, 2020)

Shares held:  812,500

Market value: $23 million

Sources: SEC 13F December 31, 2020 filing, Bloomberg, Whale Wisdom

10. Mason Capital Management

Mason Capital Management is a hedge fund based out of New York.

Founders: Michael Martino and Kenneth Garschina

Assets under management: $2.4 billion (as of March 30, 2020)

Shares held: 750,000

Market value: $21 million

Sources: SEC 13F December 31, 2020 filing, Bloomberg, Whale Wisdom

11. Scoggin Capital Management

Scoggin Capital Management is a New York based hedge fund.

Founders: Craig Effron and Curtis Schenker

Assets under management: $423 million (as of May 18, 2020)

Shares held: 750,000

Market value: $21 million

Sources: SEC 13F December 31, 2020 filing, Bloomberg, Whale Wisdom

12. UBS AG & UBS O'Connor LLC

O'Connor LLC is a distinct investment area within UBS Asset Management with complete independence from UBS in regards to investment decision-making.

Founder: N/A

Assets under management: $9.2 billion ( August 28, 2020) for O'Connor LLC

Shares held: 723,634

Market value: $20 million

Sources: SEC 13F December 31, 2020 filing, Bloomberg, Whale Wisdom

13. Citadel Advisors LLC

Citadel Advisors LLC is an American multinational hedge fund and financial services company based in Chicago, Illinois

Founder: Kenneth Griffin

Assets under management: $33 billion

Shares held: 634,412

Market value: $18 million

Sources: SEC 13F December 31, 2020 filing, Bloomberg, Whale Wisdom

14. Owl Creek Asset Management

Owl Creek Asset Management is an investment advisory firm based in New York

Founder: Jeffrey Altman

Assets under management: $3.4 billion (as of March 24, 2020)

Shares held: 624,969

Market value: $17 million

Source: SEC 13F December 31, 2020 filing, Bloomberg, Whale Wisdom

15. Weiss Asset Management

Weiss Asset Management is a global asset management firm based out of Boston, Massachusetts

Founder: Andrew Weiss

Assets under management:$2 billion

Shares held: 577,300

Market value: $16 million

Sources: SEC 13F December 31, 2020 filing, Bloomberg, Whale Wisdom

16. Corsair Capital Managemen

Corsair Capital Management  is a hedge fund based in New York City.

Founder: Jay Petschek

Assets under management: $461 million (as of March 30, 2020)

Shares held: 508,568

Market value: $14 million

Sources: SEC 13F December 31, 2020 filing, Bloomberg,Whale Wisdom

17. Ratan Capital Management

Ratan Capital Management is a hedge fund based out of New York City.

Founders: Nehal Chopra

Assets under management: $180 million (as of June 1, 2020)

Shares held: 500,004

Market value: $14 million

Sources: SEC 13F December 31, 2020 filing, Bloomberg, Whale Wisdom

18. Kensico Capital Management

Kensico Capital Management is a hedge fund based out of Greenwich, Connecticut.

Founders: Michael Lowenstein and Thomas Coleman

Assets under management: $9 billion (as of March 30, 2020)

Shares held: 479,900

Market value: $13 million

Sources: SEC 13F December 31, 2020 filing, Bloomberg, Whale Wisdom

19. Holocene Advisors LP

Holocene Advisors is an investment management firm that pursues a sector-diversified long/short equity strategy based in New York City.

Founder: Brandon Haley

Assets under management: $16 billion (as of March 30, 2020)

Shares held: 400,000

Market value: $11 million

Sources: SEC 13F December 31, 2020 filing, Bloomberg, Whale Wisdom

20. Empyrean Capital Partners

Empyrean Capital Partners is an event-oriented, multi-strategy investment manager located in Los Angeles, California.

Founders: Amos Meron and Michael Price

Assets under management: $5.3 billion (as of March 30, 2020)

Shares held: 375,000

Market value: $10 million

Source: SEC 13F December 31, 2020 filing, Bloomberg, Whale Wisdom

Here's a rundown of news on hires, exits, and promotions from the past week.  Are we missing anyone? Let us know.

• The Teachers Insurance and Annuity Association of America, also known as TIAA, announced the appointment of Thasunda Brown Duckett as its next president and CEO. She will join the firm on May 1 from her current employer, JPMorgan Chase, where she has served as CEO of Chase Consumer Banking. At TIAA, Duckett will succeed Roger Ferguson, who is departing the firm after 13 years as chief executive. JPMorgan Chase has not announced a replacement for Duckett. JPMorgan co-president and COO Gordon Smith said in an internal memo on Thursday that, in the meantime, leadership of the consumer bank will report in to him and that the firm will announce plans around succession shortly. 

• Goldman Sachs announced the retirement of Colleen Foster, global head of the commodities finance solutions team, in an internal memo to staff viewed by Insider. Foster worked in both the investment banking and global markets divisions. Previously, she had been global head of commodities sales, and held a variety of other roles throughout the firm.

• Goldman Sachs has appointed Margaret Chinwe Anadu as global head of sustainability and impact within its asset management division, according to a memo viewed by Insider. Anadu, who was previously head of the firm's urban investment group, will help to spearhead the delivery of client advisory services and solutions pertaining to arenas like inclusive growth and climate transition.

• Goldman Sachs named Sherry Wang and Daniel Alger as new co-heads of the urban investment group within the asset management division, according to an internal memo viewed by Insider. Both Wang and Alger will join the firmwide sustainable finance group steering group. The urban investment group has pledged more than $10 billion to a variety of investments across real estate, consumer and small business finance, and social enterprises, the memo said. 

• Majid Sebti, a Goldman Sachs managing director based in London, left the firm this week, according to people familiar with the matter. Sebti was a sales engineer in the fixed-income unit of the firm's global markets division. He'll be joining a former Goldman colleague at a startup focused on the media tech industry, said one of the people, who read an exit email Sebti sent to his colleagues.

• At Bank of America, Garry Collins is out after a little more than two years at the firm, and is returning to his former professional home: Credit Suisse. Collins was Bank of America's head of capital introduction. Insider first reported earlier this week that he will return to the Swiss firm where he previously worked for more than a decade before joining BofA in 2018. Collins will work on hedge fund origination under Alex Englander, head of equity sales in the Americas, according to a source familiar with the situation.

• Courtney Campbell also departed Bank of America this week to join Credit Suisse as a managing director. At Credit Suisse, Campbell will run the firm's international Delta One stock-loan business for its US clients, a source familiar with the matter told Insider. At Bank of America, Campbell had held the title of managing director in equity synthetics and securities lending, a role which she was in since 2019, according to her LinkedIn profile. Bloomberg first reported the news of Campbell's move to Credit Suisse.

• At Pimco, Kimberly Stafford, a managing director at the giant asset manager who has led its Asia-Pacific region since 2017, will return to the firm's Newport Beach, California headquarters in mid-2021, according to an internal memo viewed by Insider. She'll take up the newly created position of global head of Pimco's product strategy group. Managing director Alec Kersman, who has led strategic accounts for US global wealth management, will replace Stafford's role as head of Asia-Pacific. 
  
  Stafford, who joined Pimco in 2000, will also replace the role former funds board chairman Brent Harris held before he left the firm last year. She and Kersman will both report to Pimco Chief Executive Emmanuel Roman.

• Zach Kurz, a former Forbes' 30 under 30 member and deputy CIO for PointState, is starting his own hedge fund, sources told Insider this week. He has become another big name to leave PointState. Kurz's new firm will be called Pinnbrook Capital, and is expected to start trading April 1 with $500 million. Sources told Insider the new firm has an anchor investor that is pumping in roughly half of the firm's starting capital. Other members of the Pinnbrook Capital team include former Scoggin Capital portfolio manager Jared Lubetkin as the head of equities and former MSD capital analyst Jerome Khohayting as the head of technology, media, and telecomm investing.

• Maverick Capital executive Andrew Warford is leaving the $9 billion hedge fund. Warford, chairman of the firm's stock committee and de facto head of the fund, is departing after 18 years, Insider reported. He was tapped to head up the stock committee in 2012 and became a managing partner in 2013 as Lee Ainslie, Maverick's billionaire founder, gradually stepped back and delegated more power. Sources tell Insider that Warford will run his family office from Minnesota. 

• Finix, a payments startup, has hired three new execs, according to a recent announcement. Fiona Taylor joined Finix as COO. She was most recently SVP of Operations at fintech Marqeta, and previously worked at Tesla and Visa. Ramana Satyavarapu joined Finix as CTO. He previously led engineering at Microsoft, Google, Uber, and Two Sigma. Adam Boushie joined Finix as SVP of Revenue. He was most recently CRO at Gloo, and held sales leadership roles at Marqeta and Google. 

• Green Dot Corporation, a fintech that enables a variety of payments and banking services, announced this week that Amit Parikh, an Apple veteran, is joining the firm as the new executive vice president of its banking-as-a-service division. He will head up the company's efforts to deliver program management and tech services to a variety of consumer and tech businesses that utilize Green Dot's services, the company said in a press release. 

• The Federal Reserve System announced on Monday that Sunayna Tuteja has joined as a senior vice president and its first chief innovation officer, according to a statement from the Richmond Fed. Tuteja had been at TD Ameritrade since 2008, most recently serving as its head of digital assets. The announcement is a reflection of the growing importance of digital assets and technology in the broader financial system. 

• Tara Latini, head of wealth and personal banking for HSBC in Malaysia, will relocate to New York to take on a new role beginning April 1 as the lender's head of wealth and personal banking in the US, subject to US board approval, a representative for HSBC told Insider. The news was prompted by the departure of Pablo Sanchez, the executive who has held that role since 2015. Latini, who first joined HSBC in 2004, has worked in multiple regions for the global bank, including Europe and previously New York, where she led the US branch network. Bloomberg first reported the move earlier this week.

Shannen Balogh, Dakin Campbell, Dan DeFrancesco, Carter Johnson, Meredith Mazzilli, Alex Morrell, Bradley Saacks, and Rebecca Ungarino contributed reporting.

SEE ALSO: Bank of America is firing people in its investment bank again, after pausing annual staff culling during the pandemic

SEE ALSO: Applications for Wall Street summer internships in 2022 are already opening. Here's why the talent war for undergrads is starting earlier and earlier.

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Hedge funds have been big winners in the blank-check-company mania that's gripped markets over the past year — to the point that some industry veterans are wary of what they're seeing.

A seemingly endless stream of splashy blank-check company launches has spurred constant speculation about which companies they will take public. Many have gotten caught up in the hype.

"The greedy part of me would love" to launch a special-purpose acquisition company, said Adam Cohen, who runs the credit-focused hedge fund Caspian Capital. "The moral and ethical part of me doesn't want to play into this nonsense. It's going to end in tears."

Last week offered up a case study in just how volatile SPAC shares can be when Churchill Capital IV (CCIV), sponsored by ex-Citigroup banker Michael Klein, announced it had struck a deal to buy electric-vehicle maker Lucid Motors. 

The SPAC had surged in anticipation of the deal, but then plunged more than 50% once it was actually announced. Reddit chat boards lit up with gripes, serving as a reminder of how retail investors took to WallStreetBets to drive up the price of GameStop shares.

But in the case of CCIV, lots of smart money got in on the game early — and may still chalk things up as a win. The SPAC counted many large hedge funds as owners at the end of last year, including Millennium Management, the massive hedge fund run by Izzy Englander. Citadel and Highbridge Capital Management ranked high, too.

"Someone will spin this as a cabal, based on what we saw in GameStop," said David Tawil, the president of hedge fund Maglan Capital. "Everyone should be concerned about that."

A 'cheap basket of options'

To understand why big money is pouring into SPACs, it's important to understand the various roles that hedge funds play in the blank-check ecosystem.

SPACs trade like stocks on an exchange, generally going public at $10 a share. Investors who buy SPACs when they go public also get one half or one third of a warrant per share. The unit can be split into its components after some time, giving investors the option to play two hands.

Many sell the stock on the open market or sell it back to the manager when the merger target is announced, recouping their initial investment. They hold onto the warrant as a free call option.

Hedge funds act as pre-IPO investors to anchor a forthcoming share sale, enjoy a favored status with investment banks that give them good allocations of hot SPACs, and buy shares in the secondary market after the shares have gone public.

Many funds quickly flip the shares they get in an IPO, when retail enthusiasm and frothy markets make many SPACs pop on their first day of trading.

University of Florida professor Jay Ritter found that the first-day SPACs in 2021 were jumping an average of 6.5%, nearly six times the typical pop.  

Funds juice those returns with money borrowed from investment banks, which see SPACs as a relatively safe bet, said a banker who asked for anonymity to discuss the inner workings of the market. That means they can often put up as little as $1.25 to buy a share at $10, which also comes with a fractional warrant to buy another share.

The trade is effectively "a really cheap basket of options," said John Culbertson, the president and CIO of Context Capital Partners. "They'll buy all the SPACs in the world if they can."

New-money private-equity barons

Some hedge-fund managers, including hedge-fund billionaires Bill Ackman and Paul Singer, are even sponsoring their own SPACs.

In many deals — though Ackman's is structured differently— sponsors get as much as 20% of the blank-check company for a nominal fee, a provision known as founder's shares. This gives them a chance to swing for the fences with the type of capital that's typically reserved for their private-equity neighbors: long-term funds that can't be redeemed by skittish pension funds every three months.

"The one thing about hedge funds that the hedge-fund guys don't like is that the capital isn't permanent," Maglan's Tawil said. "A SPAC is essentially, for all intents and purposes, a PE fund. It's every hedge-fund manager's dream."

It can also be a way around the protections that the Securities and Exchange Commission has set up to limit investments in private-equity funds, which are available only to sophisticated investors with a certain level of wealth. That's making market participants and others worry about the danger that lies in wait for retail investors.

What's more, private-equity funds — already flush with cash they need to deploy — are going to be forced to compete with SPACs for deals.

"[SPACs are] distorting prices, and it's competing directly with PE, which has been raising a ton of capital," Culbertson said.

The snake eating its own tail

In other cases, hedge-fund managers are turning to their brethren to support their deals, either as anchor investors or big buyers in the IPO. Seth Klarman, the billionaire CEO of Baupost Group, is a big backer of Ackman's SPAC.

But while big investors are getting in early, they're not necessarily betting on the long-term success of what SPACs eventually buy. Morgan Creek Capital Management, run by former UNC endowment head Mark Yusko, manages a SPAC arbitrage hedge fund that solely invests in SPACs before their IPOs and sells once a deal is announced.

Meanwhile, the sheer pace of new SPAC launches is mind-boggling. More than 187 SPACs have gone public since the calendar flipped to 2021 — at a rate of nearly three a day, SPAC Research's database found. One pension fund manager said he has spoken with bankers who say their IPO pipeline is the biggest it's ever been.

That supply has given bankers great currency to reward their best customers with premarket shares in plum deals, which is widening the divide between the biggest hedge funds — which pay billions in trading commissions to Wall Street every year — and smaller funds that can be left on the outside looking in.

Chris DeMuth, founder of the event-driven hedge fund Rangeley Capital, in Connecticut, said he's never seen the SPAC market so competitive. He's adapted by focusing on building strong relationships with SPAC sponsors, who look out for him when it comes to allocating shares.

"There is a lot of competition to get allocations," DeMuth said. "If you do an enormous amount of trading business with the bank, at this point the allocation is a reward for the relationship."

Even A-Rod, Paul Ryan, and Shaq have SPACs

Thanks to the unprecedented amount of money that has been pumped into the financial system by central banks, huge chunks of capital are flying around the system faster than ever before. Now, that money is trying to find a home.

"Does it feel frothy? Yes," said Tiger Williams, the founder of Williams Trading, which was the selling group for Rogers Silicon Valley Acquisition Corp., which is taking battery-maker Enovix public in a $1.1 billion deal.

Williams compared the life cycle of a SPAC to an Ironman Triathlon. The initial fundraising is the first leg, followed by the longer haul of finding the right company at the right price before competitors do.

But the last leg — when a sponsor has to operate the company it bought — is the stage many investors in the current SPAC boom haven't reached yet. And only then will they know if the investment was actually worth it.

"If you overpay for a company, it's going to be like the tech bubble," Williams said. "In almost every expansion, there are ways to lose money. This is no different."

Other parallels to the tech bubble have begun to emerge.

One example: Celebrity-connected SPACs have become de rigueur. Former Speaker of the House Paul Ryan, basketball great Shaquille O'Neal, and pop star Ciara are among the bold-faced names who have backed SPACs.

Alex Rodriguez is one of the most directly involved celebrities in SPACs. The former New York Yankee is the CEO of $500 million Slam Corp., named in honor of his record for most grand slams by a single player.

Along with hedge-fund founder Himanshu Gulati, Rodriguez is planning to put the money from Slam's investors toward a company in the sports and entertainment sector — though the SPAC has already made it clear that it is not looking to buy a franchise. (Rodriguez was part of a buying group for the New York Mets before the franchise was sold to billionaire investor Steve Cohen.)

Gulati, who was an investor in the top-performing SPAC last year — the QuantumScape and Kensington Capital tie-up— understands why seeing celebrities flock to these deals can seem like a market top. But he said that Rodriguez has had success in private investments like personal-care company Hims & Hers Health and electric-aircraft startup Archer.

"I didn't partner with Alex just because he's a celebrity," Gulati said.

Still, Rodriguez's fame as a baseball player has been a plus. The SPAC was oversubscribed, and they have already seen a lot of deal flow, Gulati said.

"His social media, his reach, that's an asset for investors," he said. "We think our target company will increase on day one because of that."

Gulati said he and Rodriguez plan on investing alongside the SPAC in the deal and joining the board of the newly public company.

"If we were just in it for the sponsor economics, we wouldn't be planning to put so much capital into this," he said.

The aftershocks of the SPAC boom

The SPAC revolution has warped every aspect of the capital markets, industry observers said. Struggling companies and unprofitable startups have another avenue for capital, vulture investors face additional competition, retail investors believe each SPAC is going to the moon, and the private markets stay awash in capital.

George Schultze runs Schultze Asset Management, a $200 million hedge fund that goes after distressed opportunities. He launched a SPAC at the end of 2018 and took Clever Leaves, a cannabis company, public in December in a $205 million deal.

He viewed the SPAC as an extension of the investment strategy he was already running.

"There's a lot of overlap," he said. "There are a lot of companies we look at day to day that could use a SPAC solution."

Cohen, of Caspian Capital, said his firm was evaluating at least a dozen different names in the distressed space that have been taken public by SPACs over the past half year, allowing these companies to refinance their debt thanks to the equity infusion.

"We're extremely mystified, slash angry, slash jealous of it," he said.

The private markets have boosted the fortunes of some of the best-performing hedge funds of the past couple of years, especially big equity players like D1 Capital and Coatue Management. The biggest startups are taking longer to go public, while the scramble to get into the funding rounds of the hottest startups has pushed valuations higher and higher.

A ticking clock adds to the pressure. Most SPACs need to find a target to take public two years after going public or liquidate. 

Adam Stone, the chief investment officer for healthcare and biotech specialist Perceptive Advisors, said valuations in those sectors have mostly stayed in a respectable range. Still, he said he'd rather liquidate a SPAC than "massively overpay" for a company.

"This is a reputational issue for me," he said. Perceptive manages a hedge fund, several credit and venture offerings — and now four SPACs. For Stone's firm, a single SPAC deal "is not worth ruining our reputation for."

But Stone sees how sponsors who only do SPACs can get involved in lower-quality deals amid the intense competition, since just getting a deal done "is a good financial outcome for them," he said.

The incentive structure for SPAC sponsors touches every investor, Culbertson of Context Capital Partners said.

"Managers that aren't involved in the SPAC market are frustrated. There's a lot of 'can't beat 'em, join 'em' happening out there because of it," he said.

Diamond hands holding the bag

If there's a correction, the massive hedge funds and celebrity sponsors won't be the ones hurt the most.

For investors who pumped money in before a SPAC's IPO, their risk is minimal. Sponsors will collect a big fee on any acquisition they make, even if it's a bad one.

But those who buy into the SPAC once it is public — and before it has taken another company public — are risking their money on the ability of Ackman, Singer, A-Rod, and more to not only pick the right company but run it well.

Yusko of Morgan Creek also runs a SPAC-focused exchange-traded fund that invests a third of its assets into SPACs without a target. He bets on sponsors he believes in — such as Churchill Capital's Klein and Social Capital founder Chamath Palihapitiya — and puts the rest of the assets into companies that were taken public via a SPAC, such as DraftKings and Magnolia Oil & Gas.

Yusko said that if there's a crash, "people who chase red-hot SPAC IPOs and pay more than $10 a share" will be the ones left holding the bag.

Statistics bear out this fear. Greenwich-based investment bank Renaissance Capital found that of the 93 SPACs that took a company public between the start of 2015 and summer of 2020, only 29 had positive returns.

Even SPACs that take more traditional companies public have struggled: The biggest SPAC deal yet, the $16 billion United Whole Mortgage-Gore Holdings tie-up, has lost more than 30% of its value since it began trading on Jan. 22.

Yusko said that in some cases, the premiums being ascribed to SPAC sponsors are warranted — but he doesn't think it's "a huge percentage" of sponsors.

And if the bets some SPACs are making seem bubble-like, that's the price of trying to predict the future, he said. For example, companies that are focused on space travel or electric vehicles are going to be tough to value because there are no true comparisons.

Still, SPAC proponents believe that the structure, while not the perfect cure for democratizing finance, is fairer for small investors than the traditional IPO allocation structure. 

"For transparency and opportunity, I think it's better than trying to determine who gets shares" in a traditional IPO, Williams said.

And as long as both large and small investors are excited about the structure — and the incentives remain for the biggest money managers — few expect the SPAC train to slow down.

"I think there'll be thousands of SPACs," Williams said.

SEE ALSO: These are the big winners of the year of the SPAC

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• Gabe Plotkin recouped some of Melvin Capital's heavy January losses with a 22% gain in February.
• The hedge fund boss was at the center of the GameStop saga that shook markets in January.
• He has tweaked his approach, saying he has "learned from" the day-trading frenzy.
• Sign up here for our daily newsletter, 10 Things Before the Opening Bell

Gabe Plotkin's hedge fund Melvin Capital gained a chunky 22% in February, according to reports, but the investment firm remained in a deep hole after being battered during the GameStop saga.

The 22% gain, reported by numerous outlets, well outstripped the 2.6% rise in the S&P 500 across the month.

Yet Melvin Capital lost 53% in January after hemorrhaging money on its bet against video-game store GameStop, which skyrocketed when amateur traders organizing themselves on social media website Reddit got behind the stock.

The $8 billion fund needs to produce gains of 75% before earlier clients break even, Bloomberg reported. That is a tall task, even for a fund that posted average yearly returns of around 30% from 2014 to 2020.

However, hundreds of millions of dollars have flowed into the fund from investors who are confident in Plotkin's abilities, Bloomberg said. Insider has contacted a media spokesperson for Melvin Capital for comment.

Melvin's February gains are in part due to tweaks to Plotkin's trading strategy. In testimony to Congress on the GameStop saga in February, Plotkin said he had "learned" from the episode. "I am taking steps to protect our investors from anything like this happening in the future," he said.

For example, Plotkin has stopped using exchange-traded puts – contracts that allow investors to make money if a stock falls – which show up on regulatory filings and allowed his bets to be singled out by day-traders, Bloomberg reported.

The fund took an injection of $2.75 billion in cash from hedge funds Citadel and Point72, the latter run by Plotkin's mentor Steve Cohen, as the day-trading frenzy rocked the firm.

He also said in his Congressional testimony he would avoid situations where lots of investors are betting heavily against a stock.

Crowded shorts are vulnerable to the types of so-called short squeezes that battered Melvin in January. Squeezes happen when short-sellers are forced to buy back the stock to cover their positions, driving the stock price upwards.

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Compared to the average SPAC sponsor, Perceptive Advisors' track record has been phenomenal. 

Less than a third of SPACs that took a target company public between 2015 and the summer of 2020 generated positive returns, according to Greenwich-based investment bank Renaissance Capital, yet Perceptive has seen gains so far for the three private companies it has taken public in the last 12 months: German-based biotech firm Immatics, Pfizer spinoff Cerevel Therapeutics, and biotech firm Nautilus. 

Now, as the company has launched a fourth blank-check company called Arya Sciences Acquisition IV, which raised $130 million in an IPO at the end of February, the healthcare and biotech specialist walked Insider through its SPAC strategy.

"We've expanded the firm with the goal of being able to work with any life sciences company or any idea we think is good," said Adam Stone, the $8 billion firm's chief investment officer. Perceptive runs a hedge fund and several credit funds, as well as a venture fund. 

SPACs give the firm the ability to make big bets into private companies it believes in, but Stone said "I'd rather not do a deal than massively overpay." While the surge in SPACs has not yet affected valuations in his sector, Stone said the perception of Perceptive in the eyes of the firm's hedge-fund, venture-capital, and credit-fund investors is too important for Stone's SPACs to operate recklessly. 

"This is a reputational issue for me," he said. A single SPAC transaction "is not worth ruining our reputation for," no matter how much money it would make Perceptive as the sponsor of the deal, he said. 

Without a target, a SPAC liquidates and closes, returning the capital to the blank-check company's shareholders. 

Private companies in general have become more comfortable going public through a SPAC over the last 12 months as sponsors become more well-known financial figures, but "there's still a lot of private companies that would prefer to do a [traditional] IPO," Stone said.

"And that's fine with us," he said, noting that Perceptive would then try to invest in the company through the venture fund. 

One of the keys to running a successful SPAC, according to Stone, is a solid investor base that will put money in before a SPAC goes public — essentially putting their faith in Perceptive to find a company worth their bet in two years. 

"I'm very proud of the investor base we have built in our SPACs," he said, noting it was a combination of hedge funds, long-only managers, specialists, mutual funds, and other fundamental investors. Backers across the different SPACs include Bain Capital, BlackRock, Ayleska, BlueCrest Capital, Franklin Templeton, and more, filings show.

These investors "get a free look at any deal — if they don't like it, then they can redeem or sell."

But if they do like the deal, these investors are often the ones tapped first for PIPE funding — a private investment in public equity deal, which sponsors raise when they find a target and need extra funding. In Perceptive's three successful SPACs, the manager has raised more than $600 million in PIPE funding to complete the transactions. 

Either way, Perceptive's SPAC investors have been happy with the results. The economics for the hedge funds and other investors in the SPAC before it goes public are extremely favorable, and that's without considering the success of the deals Perceptive has completed. 

"It's essentially getting them a higher likelihood of an allocation in what is hopefully a successful IPO," Stone said.

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Jack Woodruff's Candlestick Capital was not the hedge fund leading the headlines during late January's market volatility, but the young fund felt the pain either way.

The $3 billion manager lost "low to midteens" in January, according to the Wall Street Journal— a far cry from the 53% Melvin Capital fell, but a big blow to a new manager that turned in 26% returns in 2020, its first year of trading. Melvin, Maplelane Capital, D1 Capital, and more suffered big losses in January when retail traders bought into certain stocks like GameStop and AMC in droves, driving up the prices of securities the hedge funds were betting against.

But just as quickly as Candlestick fell, it bounced back. Sources tell Insider the firm had a big February, returning 16% to put the year-to-date returns for the manager through the end of last month at 1.8%. 

Greenwich-based Candlestick, founded by former Citadel stock-picker Jack Woodruff, was a big launch in late 2019, partially thanks to one of the firm's backers: Ken Griffin himself.  

Griffin doesn't often back other funds, even those from investors he trained, so his sign-off led the news of Woodruff's launch. Griffin might consider getting into the fund-backing business though after his latest investment — a $2 billion infusion into Gabe Plotkin's Melvin Capital — has already reaped rewards. Bloomberg reported that Plotkin followed his disastrous January with 22% returns in February. 

Other big Griffin spin-offs also had solid months in February. Brandon Haley, who was the head of global equities for Citadel and then went onto start Holocene Advisors in 2015, made 8.5% last month, sources tell Insider. The $15.5 billion fund is up 3.3% for the year.

Richard Schimel, who was atop the now-shuttered Aptigon unit of Citadel, was up 4% in February with his fund Cinctive Capital, sources tell Insider. The $1.5 billion fund's returns for the year are just over 4%. 

Still, none of these funds have surpassed Griffin's start to the year. Citadel, with some $35 billion in assets, has finished February up 5.7% in its flagship Wellington fund thanks to a 9% return last month, sources tell Insider. 

The funds either declined to comment or did not respond to requests for comment. 

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• Eric Lane, co-head of the asset management division at Goldman Sachs and a 25-year veteran of the bank, is leaving the bank, according to a memo viewed by Insider. The news was first reported by Bloomberg. Lane is joining Tiger Global Management as its new president and COO, according to the Financial Times. Lane's co-leader, Julian Salisbury, will assume sole responsibility for the division.
• Goldman Sachs has seen a slew of other notable senior exits in recent weeks. Karen Seymour, Goldman's general counsel, is departing the firm to re-join as a partner at powerhouse law firm Sullivan & Cromwell, as first reported by Bloomberg. In a company memo viewed by Insider, Goldman Sachs CEO David Solomon said Seymour will be replaced by Kathy Ruemmler, Goldman's head of regulatory affairs, who joined the firm last year.  
• The nascent consumer business at Goldman Sachs' Marcus also saw a major shakeup in leadership this week just months after new executives took the helm of the retail bank. Partners Omer Ismail, who headed Marcus, and Adam Stark, who helped launched Goldman's Apple-branded credit card, are both leaving the bank to join Walmart's upstart fintech venture, as first reported by Bloomberg.
• Another executive in Goldman Sachs' equities business is parting ways with the bank. Jason Matthews, a partner who heads US equities derivatives sales at Goldman, is departing, according to eFinancialCareers.
• MUFG's hiring spree continues as it looks to grab market share in the US, particularly within the junk bond markets. The Japanese bank has hired a top Goldman Sachs banker, Ryan Munro, as head of its leveraged finance syndicate in the US, according to an internal memo viewed by Insider.
• JPMorgan has hired away a top mergers and acquisitions banker from Goldman Sachs to head a newly announced strategic investments M&A group. Managing director Haidee Lee, who's been at Goldman since 2018, will join JPMorgan and focus on dealmaking within family offices and private equity, according to Bloomberg.
• Goldman Sachs partner Stephanie Smith is reportedly leaving the bank to join BlackRock. Smith, a longtime Goldman executive who most recently was head of operations for consumer wealth management, has been one of the few Black female partners at the firm. The asset manager had "tried and failed to recruit her about five years earlier," per a New York Times report on Friday.
• Amid Goldman Sachs' raft of recently announced exits, the firm is looking to hire around 100 people in Singapore as it builds out its technology team there, Bloomberg reported. The hires will push Goldman's headcount in Singapore to its largest ever.
• A leadership shakeup in equity and fixed-income research at JPMorgan will see Marko Kolanovic promoted to chief global markets strategist amid a slew of exits from the bank, according to an internal memo viewed by Insider sent by Jeremy Barnum, head of global research. Noelle Grainger, head of global equity research at JPMorgan, Matt Jozoff, head of fixed income research, and Sunil Garg, head of international equity research, are all leaving the bank.
• Naureen Hassan, the chief digital officer of Morgan Stanley Wealth Management, is headed to the Federal Reserve Bank ofNew York, according to a release from the bank. At the Fed, Hassan will assume the role of COO and be the second-highest placed executive at the central bank, where she'll also sit as an alternate voting member of the Federal Open Market Committee.
• The co-head of Bank of America's global oil trading unit is leaving the firm, according to reporting in Reuters. Charles Sussman, a managing director at Bank of America Merrill Lynch, had been with the firm since 2011. 
• Also at Bank of America, a promotion will see managing director Laura Chepucavage take a seat on the global markets leadership team at the bank, reporting to sales and trading head Jim DeMare. Chepucavage will oversee Bank of America's global financing and futures desk, according to a company memo seen by Insider.
• The venture arm of Dan Loeb's hedge fund Third Point has poached a top tech research analyst from Goldman Sachs,according to reporting in Reuters. Heath Terry, the head of TMT global investment research at Goldman, is joining Third Point Ventures as a managing director reporting to Loeb and longtime Third Point ventures head Robert Schwartz.
• Holly Snyder Nichols is leaving billionaire Chase Coleman's Tiger Global, sources tell Insider. Nichols was an analyst at the hedge fund and venture capital manager for more than four years, according to her LinkedIn, and also worked as a consultant for the firm before that. Her resume includes stops at Barclays, Aquiline Capital, Luxor Capital, and Eminence Capital as well. It is unclear where she is heading next; Nichols did not respond to requests for comment, and Tiger Global declined to comment.
• The asset management division of PNC Bank will have a new chief investment officer come April, per reporting in Pensions & Investments.Amanda Agati, currently the chief investment strategist at PNC, has been with the bank since 2015. She will replace Mark McGlone, who is retiring.
• Wells Fargo Advisors is reshuffling top leadership and its business divisions, according to Financial Advisor IQ. Wells will focus on adding leadership across major market areas. In October the bank announced it was bringing together its private wealth management and brokerage businesses into one, client-facing unit, Financial Advisor IQ reported. 
• Evercore Wealth Management has promoted three employees to partner and two to managing director, according to a press release issued by the firm.Ruth Calaman, general counsel and chief compliance officer at Evercore Wealth Management, Howard Cure, the director of municipal bond research, and Ashley Ferriello, a wealth and fiduciary advisor, are all now partners. Paulo Coelho and Jennifer Tse, both wealth and fiduciary advisors, are both now managing directors.
• Citadel has hired away a top credit trader from Apollo Global Management, according to Bloomberg. Zachariah Barratt, who was the head of corporate credit trading at Apollo, will be a portfolio manager at Citadel in New York and report to head of global credit Pablo Salame.
• In January, Kim Rosenblum was appointed Betterment's first chief marketing officer in several years, Insider has reported. Rosenblum spent more than two decades at Viacom, most recently as chief creative officer and head of marketing at Nickelodeon. She left the company in December 2019. Prior to joining Betterment, Rosenblum also served in a leadership position with Women for Biden Harris 2020, from March to December 2020. She joins Betterment CEO Sarah Levy, who joined the robo-advisor in December to replace founder Jon Stein in that post.
• Financial data startup MX, which last raised money in January from the likes of TPG Growth, has two new business and finance leaders. The company announced that James Dotter, currently MX's CFO, will now serve as its first chief business officer.Brian Kinion, formerly CFO at Upwork, will also join MX and fill the CFO role Dotter vacated. 

Reed Alexander, Shannen Balogh, Dakin Campbell, Dan DeFrancesco, Meredith Mazzilli, Alex Morell, Bradley Saacks, and Rebecca Ungarino contributed reporting.

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M1 Finance hadn't spent a penny of its $45 million Series C it raised last October when it was approached just a few months later by investors about a possible Series D.

The personal finance app has caught the eye of potential investors thanks to explosive growth since the start of 2020 that saw its assets under management quadruple and its customer base increase by more than six times.

That type of eye-popping success was enough to entice Coatue Management, which made a flurry of investments in high-profile startups in 2020, including Chime and Checkout.com.

The investment firm run by billionaire Philippe Laffont led a $75 million Series D into M1 that was announced Tuesday.

With the new raise, M1 founder and CEO Brian Barnes told Insider the startup will have an easier time recruiting and staffing a rapidly growing team — and that Coatue's name will help in attracting talent. But he also said that M1 has its eyes set on new product offerings and integrating the app into every aspect of customers' personal finances.

"We're not raising money because we need it," Barnes said. "This is just adding to the balance sheet for future expansion as we think longer term."

It's the fintech's third round in nine months, a run that started with a $22 million Series B last June. M1 did not disclose its post-money valuation. Barnes says it's not yet a unicorn (a designation for startups valued at or above $1 billion), but "getting close."

Coatue joins a roster of M1's backers that includes Left Lane Capital, Clocktower Technology, and Jump Capital. Coatue brings with its investment, meanwhile, experience backing other fast-growing fintechs like teenage banking app Step, corporate card startup Ramp, and payments provider Melio.

Coatue's investment was led by Michael Gilroy, a general partner, and Daniel Senft, a senior managing partner who leads the firm's consumer and internet investing and will be joining M1's board.

Barnes said Senft told him before the deal closed that he didn't want to work on a startup that can't ultimately be a public-facing company with a $10 billion market cap.

"Having a partner who is supportive of that vision and has a big pocketbook to fund that vision over long periods of time we think is a perfect partner to bring onto the cap table," Barnes said.

From 75,000 accounts to 500,000 in just over a year

The investor interest, Barnes said, is largely due to M1's explosive growth in 2020. At the start of the year, the fintech had 75,000 funded brokerage accounts, $800 million under supervision, and 40 employees. 

Today, it has 500,000 funded accounts, is managing more than $3.5 billion, and has around 150 employees.

In part, this round will help fuel further growth, especially when it comes to hiring. M1 expects to double headcount this year, and having Coatue as a backer won't hurt in the competition for talent. 

"Raising helps by both raising your profile and giving you the money to pay the salaries," Barnes said.

And being able to attract top talent is key to Barnes' growth plans this year as Chicago-based M1 scales from a "scrappy" group of people rushing to attack a problem to a full-fledged financial-services organization, Barnes said. 

"Getting 300 people focused in the same direction is very different than getting 15 people in the same direction," Barnes said. "It attracts the talent that has been able to work at a higher scale before, which is helpful."

M1's guiding lights are Vanguard and Charles Schwab

M1's offerings are three-pronged — investing, borrowing, and spending — and it operates under a freemium subscription model. At no cost, basic users get access to these three products: M1's brokerage service, a line of credit for personal loans (the interest rate depends on the subscription level), and a digital bank account with a debit card.

For $125 per year, M1 Plus users get a second daily trading window, lower borrowing rates through M1 Borrow, 1% APY and cash back on checking through M1 Spend. 

Barnes said that he wants customers to think of the M1 app as a one-stop shop for all of their personal finance tools.

"The ideal, pinnacle personal finance account out there is really when someone says, 'I use this to manage my money.' The notion between checking and savings and brokerage is more legal in nature than in the consumer's mind. It's people who are saying, 'I have money. This is the bulk of my net worth. And I'm entrusting M1 to be the primary financial institution that I use,'" Barnes said.

Whereas there's no shortage of fintech apps out there offering no-fee checking and savings accounts and ways to save small sums, M1's product is catered more toward younger, wealthier consumers looking to invest. The vast majority of M1's assets (80%) sit in accounts with balances north of $100,000, Barnes said, one reflection of the startup's strategy to "digitize the private bank experience."

While brokerages and fintechs typically don't detail statistics around customer accounts, reporting by Insider last April showed that the median non-retirement brokerage account balance for an American in their 30s was just shy of $30,000, increasing to $135,000 for someone in their 50s. The average age of M1's users with funded accounts, meanwhile, is 35. 

To that end, Barnes looks to Charles Schwab and Vanguard as models for the change its hoping to bring to financial services. Both companies got a new segment of customers interested in investing thanks to a more accessible, often cheaper, set of financial offerings,.

However, as their customer bases increase in age, Barnes said M1 has the opportunity to play that same role for the next generation. 

To be sure, it's got a long way to go to reach the scale of Schwab or Vanguard. Schwab has more than 30 million accounts and counts around $6.8 trillion in client assets, while Vanguard also serves more than 30 million customers and has $6.2 trillion in assets.

For M1, moving the needle is about more than amassing millions of users. It's about whether M1 users are switching their primary money management preferences.

"We want to go after the banks. We don't want you to manage with the JPMorgans, the Wells Fargos, the Bank of Americas. We think we can be a next-generation Charles Schwab," Barnes said.

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The past two years have not been kind to Clint Carlson's hedge fund manager.

Carlson Capital has seen its assets fall by billions while investing talent keeps heading out the door. The latest investor update the Dallas-based manager sent out, seen by Insider, shows the damage.

Compared to the investor update the firm sent out on April 1, 2019, firm-wide assets have fallen nearly $3 billion from $7.7 billion to $4.8 billion. The drop has been most steep in the firm's multi-strategy hedge funds, Black Diamond and Double Black Diamond.  

Double Black Diamond's assets are now less than $800 million from a little over $3 billion two years ago, while Black Diamond's assets are down to just $65 million after managing more than $500 million in April 2019. 

The firm declined to comment.

Through February of this year, the two multi-strategy funds, Double Black Diamond and Black Diamond, are up 1.5% and 1.9% respectively. The average hedge fund, according to Hedge Fund Research, is up more than 5% through the same period. 

Double Black Diamond, the flagship fund, made more than 5% for investors last year thanks to a strong fourth quarter, sources tell Insider. However, it still trailed the average hedge fund's return of more than 11% in what Eurekahedge called the best year for hedge funds in more than a decade.

The firm's stock-picking fund, Black Diamond Thematic, which lost 20% in January of last year, isn't listed on Carlson's most recent performance update.

The firm's single-strategy funds, which include relative-value and event-driven funds, have seen their assets grow by roughly $200 million from two years ago despite Black Diamond Thematic's performance. The firm's CLO portfolio, or collateralized loan obligations, has stayed roughly the same asset-wise at $2 billion. 

People close to Carlson tell Insider the firm is committed to its low-leverage investing style, which doesn't include any exposure to beta, or securities most at-risk of market volatility. These people said the firm is working on projects around ESG and renewable energy currently as well. 

The firm is much leaner than it was two years ago, partially from a reorganization that happened at the end of the third quarter of last year, according to sources. In 2019, the firm boasted 61 investment professionals and 94 employees on the business side of the operation. Now, the entire firm headcount is at 93 people, with 36 of them in an investment role. 

Notable names that have left include portfolio managers Matthew Barkoff and Rob Gupta, Insider previously reported. A LinkedIn search shows analysts and others have been leaving Carlson for other firms. Former senior analyst Gonzalo Cavenaghi joined Citadel in the fall of 2019 while another senior analyst, Paul Pogranichny, stayed for less than a year at Carlson before joining Millennium. 

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• School children in Singapore are being exposed to money management through hedge fund opportunities.
• As a number of billionaires have moved to the city, Singapore has noted a shortage of qualified money managers.
• The government has launched a series of measures to boost local hiring rather than relying on expats.
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Hedge funds based in Singapore are training interns as young as 16 to work as portfolio managers for wealthy people moving to the city, according to Bloomberg.

Multibillion-dollar funds, family offices, and private-equity firms have moved to the city-state from other parts of Asia, Europe, and the US over growing concerns of Hong Kong's status. Months of pro-democracy protests last year and China's imposition of a national security law have undermined Hong Kong's autonomy. 

Google co-founder Sergey Brin, billionaire hedge fund manager Ray Dalio, and Dyson vacuum cleaner inventor James Dyson have all set up offices in Singapore because of low costs and other incentives.

The number of single-family offices has ballooned to about 200 in recent years, while overall assets under management jumped 16% in 2020 to $2.9 trillion, according to Bloomberg. Finding that it may be short on qualified money-management professionals, the city is actively looking to build up its next generation of investment managers. 

High schooler Yi Ke Cao spent two weeks last summer at a $1 billion Singaporean hedge fund, Modular Asset Management. She managed to beat 10 peers to nab the internship opportunity. Cao found herself diving into spreadsheets and observing meetings that involved money managers defending their investment ideas. 

"I was a bit terrified, I didn't know how to react to them speaking to me and I didn't know how to hold a conversation but they were welcoming," Cao, who is now 17, told Bloomberg. "I'm definitely more likely to consider it now."

Having long been considered the city of choice for Western expats, the Singapore government is seeking to boost local hires, rather than rely on global talent. Late last year, the government launched a series of measures to support the development of those in the financial sector. As part of training subsidies, it offers to cover as much as $75,000 in costs when financial institutions send their staff for overseas postings.

The CEO of Quantedge Capital, a $2.5 billion asset manager, told Bloomberg most of its new talent would likely come from internships. From a selection of 300 resumes, 10 people were handed five-week internships. Ultimately, only three secured a job. 

Singapore at one time produced "graduates who'd have the ability to join banks and big financial institutions because those were the names we were trying to draw into Singapore," he said. "Today the nature of the job has changed."

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Data is the biggest roadblock for widespread ESG adoptions. 

Clients want to know that they aren't backing companies hurting the environment or on the wrong side of the racial and gender inequity discussion. But so far governments, specifically the US, and their regulatory bodies have been slow to enact disclosure requirements for public companies, leaving ESG investors searching for answers on their own.

"There's very little mandated disclosure of ESG related data worldwide," Jeff Cohen, director of capital markets integration at the Sustainability Accounting Standards Board, which has worked to get companies to sign onto uniform reporting standards.

At BattleFin's recent virtual conference with Amazon Web Services, Cohen said the lack of disclosures means "companies can control their own narratives."

This is where alternative data has entered the fold to fill the gap. Clients of hedge funds, especially public-facing institutions like endowments and pensions, are desperate for investments to be proud of, and hedge funds are being asked to prove that their portfolios are truly meeting ESG standards.

These endowments and pensions are already facing an uphill battle when it comes to finding managers to trust on ESG. A survey of 256 institutional investors by consultant bfinance found that more than 80% of institutional asset managers said getting consistent ESG reporting across asset managers and asset classes was a challenge. ESG-focused alt data then becomes a way for these hedge funds to prove their sustainability-centric pitches. 

These money managers are already using alternative data for everything from tracking what stocks retail traders are talking about on Reddit to which stores are getting foot traffic as COVID restrictions open up. Now, a wave of data providers are focusing on finding companies' environmental touchpoints and social and governance stats.

Waste Analytics, for example, tracks how oil and gas companies dispose of waste, where these companies do it, and how much waste is being produced. Paragon Intelligence created a new product last fall to rank and quantify executive teams to find the firms with top governance rankings. Natural-language-processing alternative data firm RavenPack tracks and creates sentiment scores for public companies based on thousands of news sources and social media posts, identifying the companies scoring highest on ESG metrics with consumers.

"If you're a fiduciary, you need to be looking at ESG data and risks," said Jeff Gitterman, cofounder of ESG-focused Gitterman Wealth Management, at BattleFin's conference.

Vendors increasingly are finding that having an ESG offering leads to a quicker contract with hedge funds and other asset managers.

While alternative data has more users than ever, the entrance of large players like Bloomberg and Blackstone into the once-niche space has put margin pressure on long-time players and new entrants alike. Shortening the lengthy interview and vetting process with a hedge fund then can be the difference between a new paying customer and closing down for good. 

Peter Greene, of law firm Lowenstein Sandler, told the BattleFin conference that vendors are asking him "how do I show my client base I'm ESG-friendly?" to help speed up the conversion from prospect to paying client. 

"Your data needs to be ESG driven, but that's not enough. You need to be able to explain yourself and show your methodology," he said.

"I think we soon are going to start to see the buy-side demand that the data vendors make certain representations about what their ESG policies are early on in the sales process."

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Last year, billionaire Ken Griffin's Citadel rented out resorts for interns to come and get a month-long in-person experience.

This year, the $35 billion hedge-fund manager is planning for another in-person experience, though the details have not been hammered out just yet, a source tells Insider.

Citadel though is the exception in the hedge fund game. While some banks, mainly Goldman Sachs, push to get interns in the office for at least part of the summer, nearly all of the world's biggest hedge funds are planning to keep their summer interns remote.

DE Shaw and Millennium are set to have the largest intern classes in their firms' histories, sources tell Insider. Two Sigma is telling interns to plan for a completely virtual internship, but if the situation rapidly improves, the firm will explore in-person options, another source tells Insider. 

Bridgewater, which manages the world's largest hedge fund, has not yet finalized the firm's plan for interns as Ray Dalio's firm evaluates the landscape.

A spokesperson for Man Group, the world's largest publicly traded hedge-fund manager, told Insider that while the firm is "hopeful that we will be hosting this year's cohort in the office" in the US and the UK, it is planning to have virtual internships like the firm ran last summer.

Corona summer internships 2.0

The pandemic challenged every firm last year, but especially those with dozens of college students committed to working for them for the summer. Citadel's bubbles for interns in Wisconsin and Florida was one example how the well-funded industry responded to the crisis. Griffin's two businesses, hedge-fund manager Citadel and market maker Citadel Securities, had more than 100 college students across the two locations, and Griffin and other executives gave talks to the interns in person. 

"There is no substitute for in-person engagement during the pivotal decision point when your career is launching," said Citadel COO Gerald Beeson in a statement last summer. 

Firms proved to be flexible as well; Two Sigma allowed some interns to continue working remotely for them into the fall, as students deferred a semester of virtual learning. The CTO of the quant fund and market maker, Jeff Wecker, just announced the firm is going to experiment with a model where employees work from home two days a week in September when it plans to ask workers to return the office.

This year, managers focused on getting a diverse slate of employees into an overwhelmingly white and male industry. Millennium, which doesn't yet have a mandated date for employees to return to the office, worked with several outside groups including #10000BlackInterns to find its 80-person-strong intern class this year, a source said. The interns will be spread across five offices — New York, London, Hong Kong, Dublin, and Singapore — with all Singapore interns coming from the Asian country. 

DE Shaw's 75-person class is 10% larger than last year's, a source tells Insider, and will be working for the quant manager's New York, London, and Hong Kong offices. The interns come from 30 different schools and speak a combined 29 different languages, the source said.

More than 20 teams at the firm will work with the intern class, and DE Shaw is planning to place interns in groups with each other based on their social interests to replicate the office feel. Last year, the firm hosted a virtual scavenger hunt, puzzle challenges, and trivia events to make the internship feel more in-person.

"We are thrilled to welcome a brilliant and diverse class from around the world to intern with us this summer; the pandemic has not impacted our ability to find, develop, and learn from our future leaders," said Jeremy Reff, DE Shaw's head of recruiting, in a statement. 

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Chase Coleman's Tiger Global Management was by some measures the top hedge fund last year.

Riding a 48% return from its flagship fund, the firm returned $10.4 billion to its investors in 2020, the most among the 20 top-performing hedge funds tracked by LCH Investments, a fund-of-funds firm.

For those who've invested with or followed Coleman in the two decades since he started Tiger Global, they've probably gotten used to such impressive performance by now. The "Tiger cub"— who was seeded by Julian Robertson — has returned $26.5 billion after fees since the fund's inception in 2001, according to LCH, with compounded annual returns eclipsing 20%.

The blowout performance in 2020 coincided with the start of the firm's 20th year, making it a fitting time for the Tiger Global brass to reflect on their two-decade run.

In the anniversary letter written at the end of February, the secretive Coleman took investors inside the early days at Tiger Global and explained how some of the firm's home runs happened — and mentioned some of the fund's major whiffs and growing pains along the way. 

But first, here are some of the top-line takeaways and numbers from the letter, a copy of which was seen by Insider: 

• Flagship returns: Tiger Global's flagship long-short fund has returned 26% gross and 21% net, compounded over 20 years. If you invested $1 million with the fund at inception, it'd be worth $43 million today, compared with $5 million if you'd invested in the S&P 500 instead. 
• Long-only returns: Tiger Global Long Opportunities started in October 2013 and has produced 27% gross and 22% net returns.
• Private-investment returns: Private investing is now commonplace among large discretionary-fund managers, but Tiger Global got in early. The firm has been at it since 2003, working with over 400 companies across 30 countries. The private-equity business has generated a 33% gross internal rate of return and a 26% net internal rate of return for investors.
• Growth: The fund, which has roughly $50 billion in assets, started with two employees, but it now has just over 100 people on staff. Its investor base has "grown to 650 relationships across the firm, with Tiger Global employees representing the largest investor in Tiger Global."
• A new venture-philanthropy fund: Tiger Global Philanthropic Ventures is launching with a "$220 million initial commitment to combat inequality and poverty."

Early days, renting office space from Julian

As Coleman notes in the letter, the aftermath of the dot-com carnage wasn't a propitious time to start a technology fund, much less a fund managed by a 25-year-old. 

But he came with a legendary mentor and seed investor in Julian Robertson, the Tiger Management founder whose firm has spawned hundreds of offshoots. Coleman grew up with Robertson's son on Long Island and started work at Tiger Management right out of college.

"Julian Robertson had always believed that the right team, regardless of age or experience, could achieve great things through the power of hard work, fresh insights, and entrepreneurship," Coleman wrote in the letter. 

In addition to $25 million in initial capital, Robertson supplied office space at 101 Park Ave. to the nascent firm, as well as back-office functions and trading execution. 

"We took great pride in doing the rest ourselves, including printing, stuffing, stamping, and mailing our quarterly investor letters," Coleman said.

When internet companies were a '4-letter word,' Chinese investments provided a hot start

Despite being surrounded by the wreckage of internet companies, Tiger Global navigated the choppy waters to such a hot start that it had to remind its then six investors that it probably wouldn't sustain this level of performance. 

Back then, tech stocks were out of fashion, and "'Internet' had somehow become a four-letter word," he said in the letter. But partner Scott Shleifer, who now runs Tiger's private-equity business, noticed several publicly traded Chinese internet companies, whose values had been gutted, were growing rapidly.

Sina, Sohu, and NetEase — the "Yahoos of China" at the time — became early winners. The firm purchased shares in mid-2002, and a year later they'd appreciated "by several multiples," the letter said.

Perhaps even more important, those discoveries in China, a country largely ignored by other tech investors, laid the groundwork for Tiger Global's private-investment business. From the letter:

As we followed the breadcrumbs from these Internet portals to their biggest advertisers, we uncovered a small ecosystem of Chinese e-commerce companies, roughly akin to the Amazons and Expedias of China. Our bet was that Chinese Internet penetration could triple over the next five years from less than 5% to 15%, giving China the largest Internet user base in the world. Yet very few technology investors were focused on China. In fact, during one of Scott's trips in late 2003, the hotel staff at the Grand Hyatt in Beijing were so excited by a foreigner visiting on the heels of the SARS epidemic that they greeted him with a complimentary room upgrade.

The fund ended up signing term sheets with eLong, Joyo, and Alibaba.

But these investments didn't meet the profile for the long-short fund — they were private and "far too illiquid," the letter said. So Tiger Global started a dedicated long-duration fund called Tiger Global Private Investment Partners, which closed on the first day of 2004 with $75.8 million in capital, according to the letter.

Private investments now comprise the bulk of the firm's assets, and it has made wagers on companies including the e-commerce giant JD.com, Uber, Juul Labs, Credit Karma, and Snowflake, the cloud-storage firm that went public in the fall at frothy valuations.

Whiffs

But in the end, Coleman and Schleifer elected not to move forward with their Alibaba investment — a 4% stake at a $250 million valuation — for its first private vehicle. A 4% stake in Alibaba today is worth roughly $25 billion on the public markets. 

That's a substantial whiff, but far from the only one. Coleman isn't bashful about discussing the firm's errors over the past two decades. 

"One humbling aspect of investing is that even in your best year as a private and public market investor, you are likely to lose money on at least one out of three individual investment ideas. Mistakes at the firm level can be far more costly," he wrote in the letter.

"At a company level, we have lost money on the public and private sides in just about every way possible," he added, "including investing in non-dominant players, companies with unsustainable unit economics, and businesses that were led by unprincipled management teams."

Other missteps include:

• Losing investment focus:"In 2008, we veered too far outside of our focus areas with a negative view on banks and other cyclical industries, distracting us from owning the best Internet companies during the 2009 market recovery."
• Taking on undue exposure:"In 2016, our exposure levels were too high relative to the expected returns of our underlying portfolio, causing us to play defense rather than offense during a steep market sell off."
• Selling great assets too early:"There is an even longer list of companies we have sold too early — Facebook, Peloton, LinkedIn, Amazon, and Netflix to name a few — only to turn around and repurchase a fraction of the shares we previously owned for far more capital."

Coleman can openly discuss the mistakes, which he can write off as learning experiences that motivate the firm to get better, because the wins have far outpaced them. 

The next 20 years

The Tiger Global execs are cognizant that luck has factored in to their success. Sure, they started after the tech bubble burst, but in the larger picture, the internet economy was still in the first inning, so they had the benefit of getting in early.

One of the keys to their success has been avoiding the human tendency to make changes incrementally and recognizing the important developments "happening today that will seem obvious many years from now."

"It is easy to forget that the iPhone was launched only 14 years ago, and that just 12 months ago it was common wisdom that physical office space was essential to managing a high-performing team," they wrote. 

One trend they said would accelerate change is the proliferation of machine intelligence automating decision-making, improving efficiency, and "further embedding digital systems in our daily lives."

Moving forward, the firm doesn't expect to stray from its existing focus areas — consumer, enterprise, and financial-tech companies in the US, China, and India — as even with $50 billion in assets, they believe the opportunity set remains vast, they said. 

"By staying focused on these areas, which we believe remain in the early innings as the defining economic themes of our generation, we have endeavored to make our research and relationships cumulative in nature, with each successive year adding to our knowledge base," they wrote in the letter. 

Lastly, like Robertson himself, Coleman expects to give away a significant chunk of his wealth, estimated at more than $10 billion, according to Forbes. Creating Tiger Global Philanthropic Ventures formalizes these efforts, he wrote.

He said: "This initiative formalizes an approach to decisions that incorporate environmental, social, and governance considerations, as well as philanthropic efforts that are already underway, including programs that encourage employees to give back through annual charitable donations and commitments to community-focused organizations."

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• Credit Suisse is shaking up its asset management leadership amid the fallout from the bank's involvement in the Greensill Capital scandal, the firm announced.Eric Varvel, head of Credit Suisse's asset management business, will be replaced by Ulrich Körner, previously the president of UBS Asset Management. Varvel will remain in his roles as chairman of investment banking and capital markets at Credit Suisse and CEO of the bank's US holding company.
• Goldman Sachs has poached top equities trader Mitchell Story from Bank of America. Story, a managing director who had been at BofA for two years and helped lead the bank's index-volatility derivatives desk, is joining Goldman as a senior derivatives trader, Insider reported. Volume in equity-derivatives trading reached its highest level in a decade last year as pandemic-related swings in markets produced a boon in trading revenues at major banks in 2020.
• HSBC saw the departure of Gerry Mato, the lender's chair of global banking and markets for the Americas, according to an internal company memo viewed by Insider that was sent by Greg Guyett, HSBC's co-CEO for global banking and markets. Mato was integrally involved in developing HSBC's banking services in Latin America, the memo said, adding that he is leaving to "pursue other endeavors."
• Wells Fargo announced this week that Reetika Grewal has been appointed the bank's head of digital for commercial banking and corporate and investment banking. Grewal will join the company in late April and report to Ather Williams III, Wells' head of strategy, digital, and innovation, the firm said in a press release. Grewal comes to Wells from JPMorgan Chase, where she had served as head of digital for its commercial banking arm. She will be based in San Francisco.
• Visa has named Michelle Gethers-Clark as chief diversity officer and head of corporate responsibility, according to a press release. Gethers-Clark will join Visa's executive committee and report directly to chairman and CEO Al Kelly. She is president and CEO of non-profit United Way of Greater Greensboro, and previously spent more than 20 years at American Express. She will join Visa in May and work from the company's San Francisco office.
• Colin Kennedy, former global head of partnerships at Stripe, joined corporate card fintech Ramp as chief business officer, Fortune reported. Prior to Stripe, Kennedy was chief revenue and operating officer for Goldman Sachs' Marcus.
• Steve Allocca is joining BlueVine as the fintech's new COO, as reported exclusively by Insider. Alloca left LendingClub in May 2020, where he served as president. He previously led PayPal's business credit business and consumer lending at Wells Fargo.
• Chad Buresh, a senior vice president for alternative fund finance at bond giant Pimco, has left the firm to join hedge fund H.I.G. Capital as of January, according to Hedge Fund Alert. Buresh joined Miami-based H.I.G., which has $43 billion in AUM, as chief finance officer for credit-product investments. Prior to working at Pimco, Buresh also worked at PwC. 
• MUFG has added to its private equity sponsor and direct lending banking business with the hiring of three senior bankers. Based in Atlanta, Michael Klein joined MUFG from Regions Bank, while Keith Murray joined the firm in New York from RBC Capital Markets. They will be both managing directors of sponsor coverage within the Corporate Advisory Group at MUFG. John Timoney joined the Capital Markets Group of MUFG from Antares Capital and will be a managing director working on direct lending transactions.
• Robinhood has hired its first-ever chief product officer to oversee product, design, and research at the online brokerage. Aparna Chennapragad will join Robinhood from Google, where she spent the last 12 years and was most recently vice president of consumer shopping and also led augmented reality and visual search product teams.
• Celsius, a cryptocurrency rewards-earning lender and fintech service based out of the UK, announced in a press release this week that it has hired Rodney Sunada-Wong as the company's chief risk officer. Sunada-Wong comes from Morgan Stanley, where he served as chief risk officer for the US broker-dealer and US and Mexico derivatives swap dealers.
• Celsius also announced in a press release that it has hired Vijay Konduru to be its chief marketing officer and head of analytics. Konduru was most recently the chief marketing officer at the neo-bank Tend. He is a veteran of financial institutions like Citigroup, where he served as head of strategy and analytics for digital and brand from 2014 to 2017, and held various roles including head of US card product marketing and head of social media and emerging channels at Capital One from 2004 to 2013.

Reed Alexander, Shannen Balogh, Dan DeFrancesco, Meredith Mazzilli, Alex Morrell, and Bradley Saacks contributed reporting.

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It's easier to close a hedge fund than launch one. 

Costs for data, technology, and talent increase every year, making it that much harder for start-ups to get off the ground. According to Hedge Fund Research, 2014 was the last year when launches outnumbered closures. 

Still, investors breakthrough every year. According to Hedge Fund Research, more than 360 launched last year as of the end of the third quarter, and already this year we've seen former portfolio managers from PointState and Millennium announce their intentions to launch. 

For other money managers looking to hang their own shingle, Insider talked to more than a dozen industry insiders and compiled a list of bankers, advisors, consultants, lawyers, auditors, and more who are known for their ability to get a new manager up and running. 

Joel Press, founder of Press Management

A longtime player in the hedge fund game, Joel Press has overseen thousands of hedge fund launches. 

A former Morgan Stanley prime brokerage managing director and E&Y executive, Press even cofounded a hedge fund, Festina Lente Capital Management, in 2006. Now, through his consulting agency Press Management, Press helps a few big-name launches every year negotiate contracts, bring on talent, and structure their organization.

Patrick Andersen, partner at East Rock Capital

Patrick Andersen is talking with potential hedge fund founders constantly, as his firm, East Rock Capital, seeds new launches. 

But industry sources tell Insider that even if East Rock passes on backing a new manager, Andersen is a great resource for bouncing ideas off of. As one hedge-fund founder told Insider, Andersen is a sounding board for all things launch-related. 

Tracy Castle-Newman, managing director and chief operating officer for global institutional equity distribution at Morgan Stanley

Described to Insider as a champion for female portfolio managers, Tracy Castle-Newman has been at Morgan Stanley for 25 years and is a member of the equity operating committee at the bank. 

She wears many hats in her current role, according to a spokesperson for the bank: Among her responsibilities are client strategy, systematic advisory sales product strategy, ETF product marketing, and a joint venture with the wealth management unit, among other items. In practice, she helps connnect new managers with wealthy clients and big institutions as well as advises them on strategy.

She was named to Crain's 2021 list of notable women on Wall Street.

Steven Nadel, partner at Seward & Kissel

Steven Nadel joined Seward & Kissel in 1997 and was a partner four years later. His main function is to help new launches form their new firms, but his experience in the alternatives space means new CEOs are turning to him for advice on every part of the process.

Sources tell Insider that Nadel has even been known to connect new managers with potential backers in his network. 

Bill Stone, founder of SS&C

The founder of global fund administrator SS&C is still running his firm, 35 years later. 

Bill Stone started his administration business after working at KPMG and Advest, and now counts countless funds as his clients. While fund administration may not be the most eye-grabbing aspect of launching a fund, it's one of the first things new managers try and nail down. 

Jack Seibald, global co-head of prime brokerage at Cowen

Cowen's Jack Seibald is able to offer several different services to start-up funds, from prime brokerage connections to outsourced trading packages.

Seibald, who joined Cowen after the firm bought the company he cofounded, has been a part of Wall Street since 1983, working at some of the most recognizable names in the industry such as Oppenheimer & Co., Salomon Brothers, and Morgan Stanley. 

Diana Dieckman, global head of capital introduction at Goldman Sachs

Diana Dieckman can be the connection between Goldman Sachs' wealthy clients and your new hedge fund.

Dieckman is the global head of capital introduction for the bank, where she has worked since 2000. She oversaw the digitization of the bank's prime services division onto Goldman's Marquee platform last year, which allows new managers to connect with possible investors digitally.

Prior to the pandemic, nearly all fundraising activities happened in person, but going forward, industry insiders expect due diligence and fundraising to happen digitally more often.

Peter Greene, partner at Lowenstein and Sandler

Law firm Lowenstein's reputation in the start-up game has been growing, partially thanks to partner Peter Greene's work.

Greene worked as a chief operating officer and general counsel of a buyside firm doing PIPE funding earlier in his career, giving him unique insight into the challenges funds will face. He's also become a go-to resource for funds struggling with legal questions around external data sources, and has become a regular on the data conference circuit.

He is also the vice-chairperson of the investment management group at Lowenstein.

Jorge Hendrickson, chief revenue officer for Opus Fund Services

For new launches that need a simple solution to administration headaches, Jorge Hendrickson is someone you should know. 

Hendrickson works as the chief revenue officer for Opus Fund Services, which is a global fund administrator. He's been around all parts of the hedge fund space, working for Jack Seibald's company Concept Capital Markets in capital introduction and at Bay Head Capital allocating seed capital to new launches. 

Sean Wilke, partner and the head of strategic growth at Greyline

Compliance is important for a fund of any size, but hiring a chief compliance officer when you're just getting started can be costly. 

This has led to third-party compliance firms competing for the business of emerging managers, and Sean Wilke is a partner at one of the top offerings, Greyline. Wilke has experience working as a chief compliance officer himself, at multi-strategy fund Bramshill Investments, as well as a director role at financial consultant Duff & Phelps.

Jonathan Naga, head of business development for Williams Trading

Jonathan Naga is Williams Trading's man on the ground.  

As Williams Trading's head of business development, Naga is constantly on the hunt for new launches that he can introduce to the outsourced trading firm's suite of services. A former Goldman Sachs trader, Naga is well-connected in the industry as is his boss, former Tiger Management portfolio manager Tiger Williams.

Christopher Mears, National Leader for Emerging Managers at KPMG

Christopher Mears is KPMG's man to know for new founders.

The former chief operating officer Rothstein Kass, an accounting firm that KPMG bought in 2014, Mears helps funds with everything from performance reporting to regulatory compliance to budgeting to internal accounting. He is an audit partner at the firm as well as KPMG's national leader for new managers. 

Leor Shapiro, global head of capital intelligence at Jefferies

Leor Shapiro, a managing director at Jefferies, has many roles in the bank's prime services division. He oversees the teams running capital introduction, hedge fund consulting, and strategic content in his role as global head of capital intelligence. 

Before joining Jefferies, Shapiro was an executive at Swiss bank UBS, as the Americas head of business consulting. He also allocated to hedge funds in his career at fund-of-funds Nexar Capital. 

Steve Giordano, partner at WilmerHale

Lawyer Steve Giordano is the man to know if you're starting a hedge fund in the Boston area, and word is his team is working more with funds outside of Massachusetts. 

A former Morgan Lewis partner, Giordano joined Wilmer Hale in 2020. His team at his new digs also includes Omar Hemady and Tim Silva, fellow lawyers a part of the launch and formation team at Wilmer Hale.

Douglas Wu, head of US prime services consulting at Goldman Sachs

Douglas Wu has been all over the world for Goldman Sachs. 

Joining the bank in 1999, he has worked as an executive in the firm's Hong Kong offices for years before returning to New York in 2013. Now, he works as the head of US Prime Services Consulting for David Solomon's bank, with a network of potential hedge-fund backers all over the world.

Stuart Bourne, global head of asset management services at Bank of America Securities

Stuart Bourne got a new job last August.

After working as Bank of America Merrill Lynch's head of America's Equity Asset Management Services, the managing director started his new role leading the institutional broker-dealer business for the bank. His network to potential investors for new managers is vast thanks to his prime brokerage leadership roles in the US and the UK. 

Bourne is currently based in New York, but is originally from the UK and had worked there for Bank of America as well as Morgan Stanley for decades, advising hedge funds and other asset managers, before coming across the pond in 2016. 

Natalie Horton, global head of capital markets financing & Americas head of global markets financing at UBS

Natalie Horton is in the center of the action at UBS. 

In her role, she leads the firm's Delta One trading business, which means she oversees swaps, securities lending, and more — on top of this, she oversees cash prime brokerage and clearing in the Americas for the Swiss Bank.

She joined UBS from Deutsche, where she held several different senior roles over 15 years. 

Ted Seides, founder of Capital Allocators podcast and former hedge-fund seeder

Now known for his popular podcast, Capital Allocators, Ted Seides' 2016 book might be most interesting to potential hedge fund founders. 

"So You Want to Start a Hedge Fund" relies on Seides' experience as a seeder of hedge funds from his time running Protege Partners, an alternative investment manager he founded in 2002. Among those praising his book are billionaire Pershing Square founder Bill Ackman, Tourbillion founder Jason Karp, and former Soros CIO Scott Bessent, who called it a must-read for everyone from allocators to hopeful founders. 

Jonathan Gasthalter, founder of Gasthalter & Co.

Inevitably, a new hedge fund will have to interact with media, whether it's a trade publication or a broader business news operation. 

For hedge funds, the person they turn to to handle the press has been the man Institutional Investor dubbed Mr. No Comment. Jonathan Gasthalter is the founder of Gashalter & Co., which specializes in communication strategies for hedge funds. 

He reps some of the biggest names in the field, including Renaissance Technologies, Balyasny, and more. Some of the biggest launches of the past couple of years — D1 Capital and ExodusPoint — are also on his firm's roster.  

Michael Jordan, co-Head of capital introduction at Morgan Stanley

While he hasn't won an NBA championship (yet), Morgan Stanley's Micheal Jordan is still someone you should know — especially if you are trying to turn your hedge fund dream into a reality.

As the bank's co-head of the capital introduction team, Jordan connects Morgan Stanley's wealthy clients to emerging managers. He's well-connected with the hedge fund industry's biggest investors — institutions like foundations, pensions, and endowments — as he was a founding member of Morgan Stanley's pension, endowment, and foundation coverage group in 2010.

George Ralph, chief revenue officer at RFA

For your technology needs, George Ralph is here to help. 

The chief revenue officer and global managing director of Richard Fleischman and Associates, or RFA, Ralph strategizes with new firms on what they need out of their tech and what it should look like. He comes at it from the technology operations side of it, having served as a COO and a CTO of tech firms before joining RFA.

David Efron, co-managing partner of Schulte Roth & Zabel

Another long-time lawyer in the fund space, David Efron is one to know for your new fund.

The co-managing partner at Schulte Roth & Zabel has advised some of the biggest launches over the last couple of years, according to the firm, and also represents managers in battles with Securities Exchange Commission and other regulatory bodies. He's the co-head of the investment management group at Schulte and boasts more than 25 years of experience. 

Natalie Deak Jaros, partner at E&Y

With more than two decades in the business, Natalie Deak Jaros has been recognized by publications like Hedge Fund Journal and Crain's for her work at EY.

As the co-leader of EY's asset and wealth management sector, Deak Jaros works with new hedge funds to build up their infrastructure and also with established managers to ensure their current set-up is sustainable. 

Mark Aldoroty, managing director at BNY Mellon Pershing

Mark Aldoroty leads several different units within BNY Mellon's Pershing: He's the head of the prime services team as well as Pershing's collateral funding and trading groups. 

He's been on prime brokerage teams for the better part of three decades now, working across Wall Street. Before joining Pershing, he was the head of the client service team at Citi's prime broker, and held senior roles at Deutsche and Goldman Sachs as well. 

Dan Spies, partner at Sidley Austin

Whether you're looking for seed investors or considering the sale of a big stake of your established fund to an even bigger fund, Dan Spies can help. 

Spies is a partner in Sidley Austin's investment funds division, and has roughly two decades of experience in the industry. From private equity to funds of funds, Spies has helped launch and advise them all. 

Greg Mekanik, private fund practice leader at ACA Group

While there's a lot of great lawyers who'd be more than happy to help a fund with a sticky SEC situation, you hire Greg Mekanik to avoid that altogether.

Mekanik is the private fund practice leader at ACA Group, a compliance advisor for the financial services industry. Mekanik's specialty is the firm's hedge fund clients, where he holds mock SEC inspections and forensic testing projects to keep managers sharp and in-line. 

Declan Quilligan, head of hedge fund services at Citco Fund Services

Declan Quilligan is the head of hedge fund services for fund administrator Citco, a busy job as the firm boasts hundreds if not thousands of managers who use Citco as an administrator. 

An Irish national, Quilligan spent time serving as the managing director of Citco Fund Services Ireland Limited 2003 and as a member of the Irish Funds Industry Association's Alternative Investment committee. 

Joe Wiggins, partner at PwC

Joe Wiggins joined PwC in 1991 and never looked back, eventually rising to the rank of global head of the auditor's alternatives practice. He now works with new launches and well-established managers across hedge funds, private equity, and more. 

He also is involved with trade group Managed Funds Association, where he is the treasurer and secretary. 

Jason Kaplan, partner at Schulte Roth & Zabel

Another partner from Schulte, Jason Kaplan is who you call when you want to nail down terms of a seeding arrangement or a joint venture. 

A veteran of the alternatives space, Kaplan is a constant on the speaking circuit, talking on these topics at events hosted by prime brokers and industry groups, and also a prolific writer. His bio lists several articles in law journals and trade publications as well as the firm's own blog.