Rothschild Asset Management has announced it will strengthen its hedge fund business despite the asset class’ lackluster performance in 2014.
To lead the initiative, the New York-based firm has appointed Shakil Riaz—former CIO of JP Morgan’s internal hedge fund program—as head of US alternative portfolio management and global CIO.
Rothschild also lured Anthony Marzigliano away from Arden Asset Management to serve as a managing director. The firm said both will begin their posts in early April.
A total of 904 hedge funds closed last year, with funds returning an average of 5.5%.
The firm’s global asset management head Jean-Louis Laurens praised the two senior hires’ “expertise and know-how,” which he said “will allow us to offer a first-class service” in combination with Rothschild’s existing platform.
Riaz spent 33 years building JP Morgan’s internal hedge fund portfolio before joining Arden Asset Management in 2009. There, he led the charge in creating and managing custom hedge funds as managing director and a member of the investment committee.
Marzigliano worked closely with Riaz throughout the majority of his career, first at JP Morgan managing its proprietary portfolio, and most recently at Arden. At the alternative specialist firm, he served as managing director heading up global macro and credit research.
News of Rothschild bolstering its hedge fund business comes as the $2.9 trillion sector experienced a terrible 2014.
According to data provider HFR, a total of 904 hedge funds closed last year, with funds returning an average of 5.5%. Eurekahedge also reported the industry grew by $125.9 billion in 2014, reaching only half of the $240.4 billion raised in 2013. Net investor flows were also low at $39.8 billion last year, lagging behind 2013 figures of $137.5 billion.
Bad news continues for hedge fund managers with new regulatory requirements leading investment banks to ration their capital lending and reduce costs.
Bloomberg reported that Bank of America shed nearly 150 hedge funds last year in its prime brokerage group due to such capital and liquidity rules. Citing sources familiar with the bank, the news organization said the majority of the cuts included Bank of America’s quantitative hedge fund customers.
A spokesperson for the Charlotte, North Carolina-based bank declined to comment.
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