10/14/2009

Ex-Citadel Exec Readies Event-Driven Fund

Ervin Shindell, a big contributor to Citadel Investment's high-flying returns prior to last year's meltdown, is setting up his own hedge fund.

Shindell's firm, RoundKeep Capital of Chicago, is expected to launch an event-driven fund in the first quarter of 2010. Shindell left Ken Griffin's Citadel in March 2008 after 10 years with the Chicago firm, including the last five as head of its event-driven group.

Given his success at Citadel, Shindell's first fund is expected to launch with about $500 million of investor capital, despite the still-difficult fund-raising environment for new funds. Before falling 55% last year, Griffin's flagship hedge funds boasted a 10-year average annual return of 22%. Shindell's group was a significant contributor, at its peak running 10-20% of Citadel's capital. Before last year's downturn, Citadel had about $20 billion under management.

At RoundKeep, Shindell is expected to maintain the basic strategy he led at Citadel. The fund will focus on investments mainly in North America and Europe, and to a lesser extent on Asia. Event-driven opportunities will include typical risk-arbitrage investments in the mergers-and-acquisitions space, and the fund also will be on the lookout for catalysts such as spinoffs and corporate announcements.

Several former members of Shindell's team at Citadel are now on board at RoundKeep: Joseph Rotter, who previously headed Citadel's North American event-driven group; Rob Donath, who was global head of trading for the event-driven group; and Rob Doherty, a senior analyst for the North American event-driven group. RoundKeep is expected to add a couple of more investment staffers before the fund launch, as well as a chief financial officer and administration and operations staff.

Shindell, who serves as RoundKeep's chief investment officer, was hired by Citadel in 1998 to build and manage a European event-driven team in London. He was promoted to global head of the event-driven group following the departure of Alec Litowitz in 2003. Litowitz now runs $6.5 billion Magnetar Capital of Evanston, Ill.

As global head of the Citadel group, Shindell oversaw a staff in Chicago, London and Tokyo. Citadel disbanded the event-driven group in late 2008.

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