NEW YORK (HedgeWorld.com)--After leaving Credit Suisse First Boston more than a year ago, Robert S. Sloan has opened his own venture focused on helping small- to medium-sized hedge funds reduce costs and streamline the business of managing money.
The firm, S3 Asset Management, is a business management outsourcing service for hedge funds with between US$30 million and US$500 million in assets. "Clients can either use the savings to increased the pay offs of their bets or to increase their Sharpe ratio," said Mr. Sloan, who developed the S3 business model.
Mr. Sloan, who was a managing director at CSFB and chairman of the CSFB/Tremont* Index LLC, hired two other former CSFB executives, Bob Sisti and Hemang Patel, as managing directors. While Mr. Sloan left the firm in April 2002 Previous HedgeWorld Story, Messrs. Sisti and Patel left CSFB in the last month or so.
Mr. Sisti was global business manager for the equity derivatives and convertibles unit, supporting equity derivatives, index arbitrage, program trading, convertibles and global equity finance. Mr. Patel was a director at CSFB and held several senior management positions, including head of international operations for equity finance in London and the global business manager for equity finance operations.
The services that S3 is offering so far are: balance sheet management; time management; tax, legal, regulatory and accounting management; capital services and research and execution management. In addition to advising on basic smart business practices, S3 will help hedge funds find service providers that best fit their business and already has developed strategic partnerships with three prime brokers and a hedge fund administrator. Two more prime brokers are expected to team up with S3 shortly, and the firm also is looking to establish accounting firm partnerships.
Hedge fund administrator Derivatives Portfolio Management, Somerset, N.J., is a strategic partner of S3. Robert Aaron, chairman of DPM, said in a statement, "The S3 business model provides a vital and unique outsource opportunity for hedge funds to gain an advantage in managing brokerage relationships beneficial to all parties including the prime broker."
S3 also struck a relationship with Glass, Lewis & Co. LLC, headquartered in San Francisco, which is an independent research firm specializing in corporate governance research. In turn, Mr. Sloan serves on the advisory board of the firm. Glass Lewis' research is lead by Lynn Turner, who is the former chief accountant of the Securities and Exchange Commission. The idea is to provide S3 clients with corporate governance research to help in long/short equity investment decisions.
*Tremont Capital Management Inc., Rye, N.Y., is a strategic partner of and a minority investor in HedgeWorld.