Ex-Citadel Event-Driven Chief Rotter Launches New Hedge Fund

Dec 20 2016 | 7:36pm ET

Former Citadel head of event-driven strategies Joseph Rotter has launched a new hedge fund backed by financial services giant Neuberger Berman.

Rotter’s new entity is named Principal Strategies Group, according to an article in Crain’s, and manages approximately $209 million in assets. The fund, which reportedly began trading in October, also pursues an event-driven strategy. He is joined at the new fund by former Citadel research analyst Judd Arnold.

Rotter initially joined Citadel in 2004 after a stint as a corporate attorney at Skadden Arps. He left in 2008 following a dramatic drawdown in one of the firm’s flagship funds and founded Roundtree Capital Advisors with three Citadel colleagues, an event-driven hedge fund that ultimately managed more than $1 billion in early 2011. However, mediocre returns and a dearth of compelling investment opportunities led to the fund’s closure in October 2012, and Rotter returned to Citadel in January 2013 to head up global event-driven investments. 

His second stint didn’t last very long, however. Following Ken Griffin’s September 2015 decision to pull back on event-driven opportunities like spin-offs and restructurings, Rotter left again. He re-emerged in February at Neuberger Berman, which has been quietly building its involvement in alternative investment funds since emerging from the ashes of Lehman’s bankruptcy.

In addition to Rotter’s fund, the company has absolute return, long/short equity, long/short credit, multi-manager, private equity and liquid alternative vehicles. In total, the company manages more than $225 billion in assets for institutional and individual investors, $51 billion of which is in alternatives. 

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