Three alumni of Long-Term Capital Management, the 1998 collapse of which remains the most notorious hedge fund blow-up, are reportedly reuniting to start up a new alternatives business, Financial News reports.
LTCM co-founder Eric Rosenfeld, along with his former LTCM colleagues Robert Shustak and Bruce Wilson are opening Quantitative Alternatives based in Rye Brook, New York, according to Bloomberg. The new fund will rely on computers to choose investments, Bloomberg said.
Rosenfeld has been wandering in the hedge fund wilderness since LTCM collapsed in 1998 after it lost $4.6bn in a few months. LTCM was over-invested in Russia when the country defaulted, which necessitated a $3.5bn bailout arranged by the New York Federal Reserve Bank.
Rosenfeld became a partner in hedge fund JWM Partners and, most recently, was president of Paloma Partners, a Greenwich, Connecticut-based hedge fund. Paloma Partners confirmed Rosenfeld was no longer with the firm.