March 9, 2017 / 4:53 PM / 3 years ago

Utility-focused hedge fund Electron Capital hires Melloul from TIAA

BOSTON (Reuters) - Hedge fund Electron Capital Partners, which invests in global utilities and infrastructure companies, has hired Eric Melloul as a partner from financial services company TIAA, a person familiar with the move said on Thursday.

Melloul, who joins the $610 million fund as its sixth investment professional, was responsible for overseeing portfolios with combined assets of $1.3 billion at TIAA.

Electron, an 11-year old hedge fund founded and run by Jos Shaver, is attracting attention. Many large investors are searching for assets not correlated to the broader stock market or interest rate movements as the U.S. Federal Reserve is signaling plans to raise borrowing costs, analysts said.

Electron’s focus on utilities, which it believes will be affected by significant changes in public policy, new technologies and environmental regulation, are considered more off-beat than bets many other hedge funds make on popular technology or healthcare names.

At the end of the fourth quarter, Electron owned stakes in U.S. utilities and telecommunications companies Exelon Corp, Avangrid Inc and Dominion Resources Inc, according to a regulatory filing. It also invests as much as half of its capital abroad, in utility and infrastructure stocks in Europe, Asia and Latin America.

Electron’s investments are rarely found on lists that tally the companies most widely owned by hedge funds.

This could give the firm renewed traction with investors who have recently complained that many managers tend to crowd into the same names.

Electron gained 5.2 percent this year, while the HFRI Equity Hedge (Total) Index rose 3.06 percent in January and February.

The fund lost roughly 3 percent last year, when most hedge funds made money, and gained 18 percent in 2015, when most lost money.

Over its lifetime, Electron has posted an annualized return of 10.4 percent, compared with a 4.4 percent gain for the HFRI index and a 1.5 percent return of the MSCI World Utilities Index.

Electron usually has 100 names in its portfolio, and a chunk of its returns are generated by betting against a stock, or shorting.

For four years, Shaver and most of Electron’s investing team were part of Steve Cohen’s SAC Capital and managed an average $1.3 billion.

SAC had been one of the industry’s most successful funds, but it pleaded guilty to insider trading in 2013 and has since returned outside capital.

Electron spun out in 2012 and last year hired Winston Holt, who previously worked at hedge fund Maverick Capital, to focus on investor relations and business development.

Reporting by Svea Herbst-Bayliss; Editing by Lisa Von Ahn

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