Hedge fund veteran's new firm to tackle funding

By Svea Herbst-Bayliss

BOSTON (Reuters) - Meeting long-term funding obligations can be the stuff of nightmares but that's what hedge fund industry veteran Philip Duff says his new firm can do to help pension funds, endowments and insurers tackle.

For years, Duff has warned these organizations could soon run out of money and has urged them to find a fresh approach.

Now he is offering help through Duff Capital Advisors, his four-month-old company that offers not only hedge funds but products that could set actuaries' hearts racing. For example, its risk analysis models can help insurers calculate ways to hedge mortality risk and help clients select appropriate types of investments.

"This is about taking a more holistic approach to helping them fund those obligations, and so much more than saying 'here is my investment product, do you want to buy it or not?'" Duff said in an interview on Tuesday.

Duff, whose resume boasts degrees from Harvard and the Massachusetts Institute of Technology, a stint as Morgan Stanley's (MS.N: Quote, Profile, Research) chief financial officer and experience at world famous hedge fund Tiger Management, has a history of handling risk and growing companies.

Two years ago he sold FrontPoint, the hedge fund business he founded with two partners and turned into a $5.5 billion (2.7 billion pound) company, to Morgan Stanley for about $400 million.

Now he expects this business to grow bigger and faster than even FrontPoint did.

Indeed Duff said he expects to become one of only a handful of investment firms that will be able to offer its own financing and bypass Wall Street's sometimes prickly prime brokers who are more tethered to market gyrations.