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December 13, 2017  

Citadel Beckons for Disillusioned Managers

Yet another hedge fund manager has given up the risk-reward potential of running his own business for the relative ease of working at a big multi-strategy fund operation.

Less than a year after opening Trenchant Capital, Tyson Strauser is set to join Citadel this week as a portfolio manager. Strauser is among an increasing number of hedge fund operators who lately have turned in the keys to their businesses in favor of jobs at Citadel, Millennium Management and the like, where traders are given near-total discretion to run their portfolios along with state-of-the-art technology and ample back-office support.

Exactly why Strauser shuttered his New York equity-trading operation is unclear. What’s known is that he managed to raise some amount of outside capital ahead of a launch originally slated for the second quarter of 2017. When, or even whether, Trenchant began trading is unknown.

Strauser had high hopes of a respectable launch given his background as a senior analyst at Samlyn Capital, an equity-fund manager that had a little more than $7 billion of gross assets at yearend 2016. In talks with prospective Trenchant investors, Strauser touted an ability to identify investment opportunities via big-data analysis, with a focus on consumer, internet and retail stocks. He quickly assembled a five-member team including chief financial officer Michael Jemal and senior analyst Jia-Mang Ten.

It’s possible Strauser concluded it would take too long for Trenchant to reach a break-even point, where the fee revenue generated by the fund would be sufficient to meet expenses. It’s also possible the logistical headaches of owning a business made him yearn to focus on investing once again.

Citadel, with $27 billion under management, has been a virtual magnet for hedge fund managers who have had their fill of running their own businesses. Recent examples include Paul Sinclair of Blue Jay Capital; Porter Collins and Vincent Daniel of Seawolf Capital; and Michael Berkley and Neel Parekh of Night Square Capital.

In a similar vein, Joel Drescher recently shuttered his Drescher Capital to join Millennium, and Adam Fisher pulled the plug on his CommonWealth Opportunity Capital for a position at Soros Fund Management.

CORRECTION (12/14/17): This article has been revised. The original version incorrectly referred to Tyson Strauser’s former position at Samlyn Capital, where he was a senior analyst.