April 1, 2016 / 9:41 PM / 3 years ago

UPDATE 1-Former Shumway executive Wilcox launches own hedge fund

(Adds details on new firm, founder’s background)

By Svea Herbst-Bayliss

BOSTON, April 1 (Reuters) - Cider Mill Investments joined the $2.9 trillion hedge fund industry on Friday when founder Tom Wilcox, a former executive at Shumway Capital, officially began trading the newly established firm’s $150 million in assets after years of managing his personal money.

“Today marks the first day of investing outside capital for Cider Mill Investments,” Wilcox wrote in a letter dated April 1 and seen by Reuters. He told investors he has commitments of $400 million.

The firm will focus on selecting global stocks and Wilcox said current volatile market conditions coupled with the firm’s smaller size should work in its favor.

A spokeswoman for Cider Mill declined to comment.

For Wilcox the launch marks a return to the hyper competitive hedge fund world where he had been the heir apparent at Chris Shumway’s $9 billion Shumway Capital until the firm closed in 2011.

Wilcox was credited with Shumway’s call to bet against financial stocks in 2008, earning the firm strong returns and himself accolades from the boss, who called Wilcox the “single most profitable individual in our firm’s history.”

For the last five years Wilcox invested his own money at a family office but decided to transform the operation into an institutional investment firm to “pursue my passion of investing in global equity markets while competing at the highest level in that arena,” the letter said.

2016 has so far been difficult for hedge funds with most managers losing money and some institutional investors moving to pull money out, especially from firms that have been underperforming in recent years.

Research firm eVestment reported that hedge funds took in only $4.4 billion in February, well below the average $22.6 billion added during the month of February in the 2010-to-2015 period.

At Cider Mill, Wilcox is reuniting with several former Shumway colleagues including Ken Palumbo, who will be his chief operating officer, Jeff Nykun, who will be the fund’s investment analyst and Susan Suh, who will be the firm’s trader. Nykun and Suh had already been working with Wilcox at the family office.

George Landrove will be the firm’s controller while Shara Illiano will handle investor relations, rounding out an 11-person team. (Reporting by Svea Herbst-Bayliss; editing by Sandra Maler, G Crosse)

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