06/08/2011

PioneerPath Getting Behind Traderís Launch

An energy-stock trader who has enjoyed the backing of Citadel unit PioneerPath Capital is about to head out on his own, with the firmís continued support.

Todd Kantor is in the early stages of setting up a New York operation called Encompass Capital that would follow the same strategy he has employed at PioneerPath ó one of two multi-manager units under Citadelís umbrella. Chances are that it will take him several months to get organized and raise enough outside capital to hold a formal launch.

In the meantime, Kantor and Citadel are hammering out details of the arrangement. Itís almost certain that Citadel will invest directly in Kantorís fund alongside other backers, and itís possible heíll separately continue to run his current portfolio at the firm ó a setup that could help bolster confidence among outside investors.

The pact also marks a milestone for Citadel, as Kantor is the first portfolio manager chosen by the firm to spin off with backing from PioneerPath or its sister unit, Surveyor Capital. Kantor, formerly an investment analyst at Touradji Capital, joined PioneerPath in 2008, the year Citadel launched the business. He has one of the longest track records of any professional within the unit, which brings in equity managers to invest as Citadel employees.

That Kantor is the first to spin off also suggests that he has delivered some of the strongest returns. His portfolio at PioneerPath presumably is on the large side for the division, whose managers can run hundreds of millions of dollars.

Between PioneerPath and Surveyor, which launched in 2010, the two Citadel units encompass about 50 teams of managers. The groupsí sources of capital include Citadelís main hedge funds, Kensington and Wellington.

PioneerPath and Surveyor are overseen by Jon Venetos. Both teams have seen turnover recently (see article on Page 6). Citadel, led by Ken Griffin in Chicago, has about $11 billion under management.

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