NEW YORK–Peter Algert and Kevin Coldiron, the principals of Algert Coldiron Investors, used seed money from J.P. Morgan Partners LLC, to launch a new hedge fund.
The new fund, launched April 1, targets both U.S. as well as non-U.S. investors. It will trade U.S. equities with a focus on small- and midcap stocks, basing its stock selections on three bottom-up models: earnings quality, relative value and relative growth. Citco will provide its services as prime broker and administrator; Howard, Rice, Nemerovski, Canady, Falk & Rabkin, P.C. as legal counsel.
Messrs Algert and Coldiron were each until recently managing directors of Barclays Global Investors Ltd., London, where Mr. Algert headed global equity research, managing US$70 billion of quantitative equity portfolios, and Mr. Coldiron founded and ran the firm’s European hedge funds.
Mr. Alger has been an assistant professor of finance at the University of California at Davis and a consultant for Barra. Mr. Coldiron was an economic analyst for the Federal Reserve Bank of New York before he arrived at BGI.
J.P. Morgan described the two men as a “compelling combination” in an April 4 statement. Morgan is making this investment (US$25 million) through the new JP Morgan Incubator Fund, a fund of funds established in December, under the management of its JP Morgan Incubator Strategies division. This represents JPMIF’s second investment in a hedge fund. The first was with Strativarius, a global macro fund.
The chief executive of JPMIS, Simon Lack, has had extensive experience investing in hedge funds and managing derivatives trading businesses since he joined JP Morgan in 1986. He plans to seed one to two managers each quarter for two to three years, which will give JPMIS a portfolio of between 12 and 15 seeded funds.