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Derivatives

Hedge Fund Builds Power Trading Desk

Ritchie Capital Management, a Geneva, Ill.-based hedge fund, has launched a power and energy trading desk. Paul Wolfe, senior v.p. of business strategy and development, said the hedge fund has hired four traders from Williams Co.s, Duke Energy and Enron and plans to recruit one or two more over the next six months as it rolls out the project. The distressed state of the wholesale power sector and the withdrawal of many traditional energy trading shops is creating opportunities for the hedge fund, explains Wolfe.

Pratt said the USD1.2 billion Ritchie fund is in many senses getting back to its roots. Company-founder Thane Ritchie, who was on the U.S. national bobsledding team in the early 1990s and also is a former pro-footballer with the Pittsburgh Steelers and Chicago Bears, worked at commodity derivative outfit Chicago Research and Trading (CRT), a firm in Chicago founded by his father Joe Ritchie. In 1993, when Charlotte, N.C.-based Nations Bank bought CRT Thane Ritchie left to open Ritchie Capital Markets, an options trading company and gradually shifted the company's focus away from commodities to financial arbitrage management. "For a lot of these guys going back to trading is like coming home," says Wolfe. He adds seven out of the company's eight partners are CRT alumni.

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