After posting strong returns in 2008 and 2009, Hutchin Hill Capital, founded by former SAC Capital Advisors quant chief Neil Chriss in late 2007, is marketing to outside investors for the first time.
The fund, Hutchin Multi-Strategy, launched in July 2008 with $300 million from the Meritage Fund and Renaissance Technologies founder Jim Simons’ $7 billion family office, which manages money for several Renaissance partners.
Once he launched the firm, Chriss immediately closed Hutchin Hill to outside investors. The firm manages $400 million and is hoping to reach $1 billion, according to a source close to the firm.
Hutchin Multi-Strategy invests in all liquid markets, including equities, credit and currencies. The fund gained 13% in 2008 after launching that July and rose 17% in 2009. Throughout 2008 the fund benefited from its focus on remaining hedged and having extremely low exposure and low correlation to the markets.
Chriss first met Simons on the board of Math for America, a New York foundation that promotes math education in New York City schools.
“I don’t think there’s anyone out there close with both Stevie Cohen and Jim Simons,” said an individual close to Chriss. “They’re both geniuses but with different styles. Neil is the bridge between those two styles.”
Chriss is one of the world’s most seasoned quants. He is one of 25 quantitative professionals profiled in the 2007 book “How I Became a Quant,” which revealed that Chriss learned computer programming when he was 11 years old.
He earned a Ph.D. in mathematics from the University of Chicago and in 1998 joined Goldman Sachs’s quantitative strategies group, where he became a portfolio manager and ran a volatility arbitrage book for the firm’s Global Alpha fund.
Chriss left Goldman in 2000 to found iCor Brokerage, a derivatives trading firm that was later sold to Reuters.
In 2003 Cohen hired Chriss to build a quantitative trading desk at SAC. The division generated strong returns and at its peak ran two-thirds of the SAC Multi-Strategy fund’s assets. Chriss left in early 2007 to form Hutchin Hill, before the quant crisis hit in August 2007. “I saw it all coming, of course, so I decided to take the year off,” Chriss joked at the 2007 Absolute Return Symposium.
While tens of billions of dollars flowed into quants, volatility appeared low, which led quant managers to increase leverage. This in turn led to an overlap of names held by quant managers.
“People talk about the domino effect, and it’s ironic that Domino’s Pizza has an actual stock, and it was something that was in the 13Fs of a lot of quant funds,” Chriss joked.
The quant meltdown of 2007 was reminiscent of Long Term Capital Management’s implosion in 1998, which revealed a surprising correlation between merger arb and emerging market debt.
—Suzy Kenly
