March 20, 2020 / 8:56 AM / 20 days ago

Ex-Tudor manager's investment firm scores big in market turmoil

LONDON (Reuters) - An investment firm founded by a former senior portfolio manager at Tudor Investment Corp, Theodoros Tsagaris, is up 17.7% since the start of March, when markets went into a coronavirus-fuelled tailspin.

Bayforest Technologies, the short-term systematic money manager he set up after 6-1/2 years at Tudor, is up 18.8% since the start of the year and had just one day of losses in March.

Currently running $40 million in separate accounts for a number of clients, it aims to launch a fund for institutional investors later in the year after chalking up a two-year track record, said Chief Operating Officer David Beddington.

Bayforest uses computer models to trade across a range of markets, from oil to credit and stocks, and has profited from the recent sell-off as other investors sold aggressively.

“As we’re short-term, relative-value trading, these market dislocations caused by a lot of portfolio liquidations ... creates a spread, effectively, in assets that should trade more in line with each other,” Beddington said.

“So one day a group of traders dump a position in one part of the market and destroy those prices relative to others, and it’s an opportunity that we can pick up on.”

Beddington said fixed income markets over recent days had been particularly challenging for many as they sold off at a time when most would have expected them to rally, given monetary stimulus measures announced by central banks.

“Yet, fixed income is doing the reverse of what you’d expect if you had a Fed put in the market, however that’s driven by portfolio liquidations ... we can see these dislocations and trade around them.”

Tsagaris, an early employee at BlueCrest, in the team that later became Systematica, then went on to work for several years at London-based GSA before being hired by Tudor.

Editing by Mark Potter

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