Ex-Goldman star Mindich launches $3bn hedge fund | Financial News
Eric Mindich, a former star Goldman Sachs trader, has succeeded in launching a hedge fund of more than USD3bn (â‚¬2.3bn), one of the largest start-up funds on record. The successful start of Eton Park Capital comes despite heavy fees and other difficult terms for potential investors, according to The Wall Street Journal. James Hedges, president of LJH Global Investments, which invests in hedge funds and advises clients told The Wall Street Journal: "This is certainly the largest new fund I've seen in the last 15 years. The largest until now were about USD1bn." Fund of hedge funds managers have said the USD23bn Harvard endowment and Goldman Sachs partners were the biggest investors in the fund. Mindich, a Harvard graduate, is a former director of the endowment's governing board. He became Goldman Sachs' youngest partner, at 27, in 1994. Investors have to tie up their money in the fund for four-and-a-half years to avoid a heavy 6% redemption fee; have to invest at least USD5m to get into the fund; and will pay an annual management fee of 2% - higher than the usual; and hand over 20% of any investment profits. Mindich plans to invest as much as 70% of Eton Park's money in traditional equity strategies involving both purchases and "shorting" - or the sale of borrowed stock in a bet the stock price will decline. Given the size of the fund, Mindich has assured his investors that he will range wide to produce big returns, including Latin American, Eastern European and South African markets. As much as 30% of Eton Park's funds may go into less easily tradeable "private" transactions. Investors say Mindich has assembled Stuart Hendel, formerly a managing director in Morgan Stanley's prime brokerage division, and former Goldman Sachs traders Erland Karlsson and Scott Prince who will be in charge of equity derivatives. Edward Misrahi will be responsible for emerging market investments.
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