Two Credit Suisse First Boston equity derivatives marketers plan to set up a long/short hedge fund in New York next month. Joe Vencil, managing director and marketer to high-net-worth individuals and corporations, andManit Rye, a marketer for CSFB in London, plan to raise USD15-25 million in seed capital to launch the fund and employ a long/short strategy that focuses on small and mid-cap corporations, Vencil said. The total capacity of the fund has yet to be determined, but increasing the fund above USD50 million would likely require the hiring of additional professionals, added Vencil.
The fund will use equity derivatives for hedging as well as shorting stocks. "We expect to be short some equity all the time," Vencil noted. He added that both he and Rye will handle the trading duties at the fund. Vencil was part of the equity derivatives trading team at Donaldson Lufkin & Jenrette before moving to CSFB following the merger of the two firms in 2000.
The hedge fund company will be called Rye-Vencil Management with the fund being named RVM Global. Vencil and Rye left CSFB in January. The hedge fund will invest globally, with about 70% of its investment focus on U.S. corporations. Bank of America will serve as the fund's prime broker, Vencil said. "This is something I've been thinking about for a long time. The timing just seemed good," Vencil said.
"I've been thinking about going to the buyside for a long time," added Vencil. While at CSFB, Vencil reported to Tim Bock, head of derivatives marketing in New York. Rye reported to Paul Calello, global head of equity derivatives. Calello and Bock declined to comment.
