A quartet of bankers and analysts from Bear Stearns, Putnam Investments and a research firm have joined forces to launch a telecom, media and technology long/short equity hedge fund that will use over-the-counter derivatives. The fund, dubbed Pythar Capital, is expected to start trading on Oct. 1 with USD25-40 million and will be based in the Boston area.
Doug Ashton, a telecommunications equity analyst at Bear Stearns until November and one of the joint managers of Pythar, said he has been interested in launching a hedge fund for a long time and had discussed the move with Tim Straus, a senior managing director in hedge fund products and relationships at Bear Stearns. Straus quit Bear Stearns recently to join Pythar, where he is responsible for establishing support services for an umbrella of hedge funds. The services will include providing more creative use of OTC derivatives to provide additional financing leverage, Straus said.
The other two members of the team are Steve Kirson, emerging growth fund manager at Putnam, who will co-manage the fund with Ashton, and Tom Nolle, president of research firm CIMI Corp. Nolle will continue to run CIMI as well as provide fundamental industry forecasting. Kirson and Nolle confirmed the move.
The four will also be joined by a trader from a hedge fund in New York, who Ashton declined to name because he has not yet resigned.
The paths of the four principals have crossed previously, notably when Ashton was working in research at John Hancock and Strauss, while employed at the same firm in institutional sales, was the former's first boss on Wall Street. The two later joined Jefferies & Co. at the same time and eventually went to Bear Stearns. Nolle also has a long-standing relationship with Ashton. "I have collected people I have had a lot of respect for through the years," Ashton said.
The fund's target return is 15-18% with one-and-a-half times leverage. Ashton said he hopes to launch a total of four funds over the next six to nine months. The fund has selected Morgan Stanley as its prime broker.
