Multi-Manager Push Gains Momentum
Two former Lighthouse Investment executives are nearing the launch of a novel multi-manager program that has been more than two years in the making.
Indications are that John FitzGibbon and Barry Timmins will start trading through their Alpha Paradigm Partners this year. While it’s unclear how much capital the Chicago operation will be running on day one, a source said its commitment pipeline grew at Context Summits’ “Miami 2020” conference on Jan. 29-31 in Miami Beach.
Alpha Paradigm would run separate accounts, routing capital to a range of outside managers while adding hedges to those firm’s strategies to the specifications of each limited partner. For example, the firm has considered adjustments that could create market-neutral portfolios from the investments of long-bias or variable-net-exposure specialists.
There’s no word on whether a commingled fund of funds also is in the works.
Alpha Paradigm has been talking exclusively to institutional investors with the means to deploy sizeable slugs of capital. Sources said early interest from prospective limited partners and service providers has been strong, thanks to the backgrounds of FitzGibbon and Timmins.
However, one source said the fees and startup costs involved in carrying out Alpha Paradigm’s strategy could be high, and thus could turn off some investors.
FitzGibbon was at Lighthouse from 2001 to 2016. As a managing director at the Palm Beach Gardens, Fla., multi-manager, he concentrated on identifying underlying hedge fund managers.
Timmins was at Lighthouse from 2005 to 2017. He also was a managing director there, with a focus on creating and overseeing multi-strategy separate accounts and commingled funds. Since leaving, the two have spent much of their time developing Alpha Paradigm’s investment strategy, risk profile and technology.
Also on board are: technology head Jeff Schwartz, who worked at separate-account manager Astor Investment from 2016 to December 2019; head trader John Mawicke, who had been at Nighthawk Capital since 2014; and chief operating officer and chief financial officer Paul Schwarz, who was at Lighthouse from 2001 to 2016.
Lighthouse, led by Sean McGould, has about $14 billion under management. Among multi-managers, the firm was early to allocate capital to hedge fund operations via managed accounts.