A former senior trader at Bridgewater Associates who’s yet to crack 30 years of age has founded his own hedge fund. Erick Quay launched the eponymous Quay Capital in New York late last month.
Quay has climbed the career ladder at lightening speed. He spent three months as a summer analyst at J.P. Morgan in 2013 before taking on a full-time position with the bank the following year after graduating from Williams College. Quay then jumped to the buy-side after less than a year when he joined Ray Dalio’s Bridgewater Associates in 2015. He was eventually promoted to senior trader before deciding to hang his own shingle in July.
The new hedge fund, which reportedly has assets under management of between $10m-$50m, won’t focus on traditional liquid financial products. Instead, Quay will take positions in more “esoteric and concentrated” opportunities, according to the firm’s website. It’s unclear whether Quay Capital is actively hiring, though the site says the company is accepting resumes and is always looking for talent.
Quay is launching his own firm at an interesting time. While some well-established and smaller firms – particularly quant funds – are cranking out double-digit annual returns, many big-name hedge funds like Bill Ackman’s Pershing Square Capital and David Einhorn’s Greenlight Capital have suffered from an extended run of losses and redemptions. Meanwhile, several veteran hedge funds like Blue Ridge, Eton Park and Hutchin Hill closed their doors in 2017, while others like Tudor Investments have shuttered underperforming funds. The number of new hedge fund launches have declined for six straight years while closures have increased every year over the last three.
That’s not to say everyone is suffering. Former Millennium Management star trader Michael Gelband’s new fund just set a record for the biggest hedge fund launch ever. ExodusPoint Capital Management raised $8 billion despite an aggressive fee structure and a delayed launch date caused by a legal spat over hiring. Quant funds like Renaissance Technologies, PDT Partners, WorldQuant and Two Sigma are also said to be crushing it, as is Steven Cohen’s Point72, though that’s nothing new. Quay declined to comment on the direction of the new fund.
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