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Schonfeld Strategic Advisors

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Schonfeld Strategic Advisors LLC
Schonfeld Group
Company typePrivate
IndustryFinancial services
Founded1988; 36 years ago (1988)
FounderSteven Schonfeld
Headquarters590 Madison Avenue, New York City, New York, U.S.
Key people
Ryan Tolkin (CEO)
ProductsHedge funds
Alternative investments
Systematic trading
Quantitative finance
AUMUS$13.8 billion (2023)[1]
Number of employees
1,000 (2023)[2]
SubsidiariesQuantbot Technologies
Websitewww.schonfeld.com
Footnotes / references
[3]

Schonfeld Strategic Advisors (also known as Schonfeld and SSA) is an American hedge fund based in New York City. Formed in 2015, Schonfeld continues the business that Steve Schonfeld established in 1988 – a family office pioneering in short-term, systematic and algorithmic trading.[4][5]

Schonfeld registered as an investment advisor with the SEC in January 2016.[6] As of 2021, Ryan Tolkin served as CEO and CIO.[7]

History

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Steven Schonfeld founded Schonfeld as a proprietary trading firm in 1988 with $400,000 that he earned working as a stockbroker.[4][5][8][9][10]

The firm made $200 million in 2000 at the peak of the Dot-com bubble but made losses following the Stock market downturn of 2002.[5][10]

By 2004, Schonfeld employed 1,200 traders with 700 on the proprietary side[11] In 2005, the firm noted that the proprietary traders contribution to the firm's overall revenue declined from 98% five years ago to 60%.[9] Schonfeld Securities, the trading arm of Schonfeld's capital saw a decline in assets from $2.5 billion in 2000 to $670 million four years later.[9]

In 2006, Schonfeld moved into algorithmic trading as it saw computer driven strategies were going to be faster than traditional trading.[5][10][11]

Schonfeld made $200 million off volatility during the 2007–2008 financial crisis.[5]

In 2009, Schonfeld switched from being a proprietary trading firm into a family office that would manage the assets of Steven Schonfeld.[2][8] In the same year, Schonfeld helped fund the establishment of Quantbot Technologies to manage its assets. Quantbot Technologies is a quantitative firm founded by employees who were previously part of the statistical arbitrage proprietary trading group (QSA) of Merrill Lynch & Co .[5][12]

Regulatory issues

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According to The Wall Street Journal, between 1996 and 2009, financial regulators had taken action against Schonfeld 16 times.[10]

In December 1999, the New York Stock Exchange (NYSE) fined Schonfeld and one of its officers $1.5 million for day trading violations.[5][11][13]

It was reported by Forbes that Schonfeld has been fined at least twice during 2000 to 2005, by the National Association of Securities Dealers for violation of rules on the Nasdaq Small-order execution system.[9]

In 2009, NYSE fined Schonfeld $1.1 million for performing Round-tripping trades to hide capital shortfalls in 2005.[5][10][14]

Schonfeld Strategic Advisors (2015–present)

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In 2015, Schonfeld announced that it would accept capital from investors outside the firm and changed its structure to a Multi-strategy hedge fund.[5][2][8]

In January 2016, Schonfeld began to manage third-party assets alongside its family office.

In 2018, Schonfeld acquired Folger Hill Asset Management, a hedge fund founded by Sol Kumin.[15][16][17] One of the reasons for the acquisition was to help Schonfeld expand in Asia.[15][16][17]

In 2019, according to Bloomberg News, Schonfeld achieved an average return of roughly 20% in the previous six years which was almost double that of the S&P 500 Index.[5]

In January 2021, Ryan Tolkin assumed the additional role of CEO.[7]

In August 2021, Schonfeld launched its second headquarters in Miami, Florida.[18]

In January 2022, Schonfeld established its Discretionary Macro & Fixed Income business.[19]

In October 2023, it was reported that Schonfeld and Millennium Management were in talks to establish a partnership where Millennium would invest in Schonfeld.[20] However in November, the two ended talks of a partnership. Schonfeld then proceeded cut 150 staff which was 15% of its workforce.[21]

References

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  1. ^ "Schonfeld Strategic Advisors fund doubles size of Wynwood office". South Florida Business Journal. February 23, 2023.
  2. ^ a b c Saacks, Bradley. "Inside the rise of Ryan Tolkin, the 34-year-old investing mastermind behind Schonfeld's transformation from family office to 600-employee hedge fund heavyweight". Business Insider.
  3. ^ "Form ADV" (PDF). SEC.
  4. ^ a b "Hedge fund expected to hire around 40 people for new macro fund". eFinancialCareers. June 1, 2021.
  5. ^ a b c d e f g h i j "Homebody in a Hoodie: Hedge Fund Founder Builds Quant Paradise". Bloomberg.com. December 3, 2019. Retrieved January 15, 2023.
  6. ^ "Investment Adviser Firm Summary". SEC. December 31, 2015.
  7. ^ a b "Meet Ryan Tolkin, the 34-year-old behind Schonfeld's transformation from family office to hedge fund heavyweight". Business Insider. July 22, 2021.
  8. ^ a b c "Exclusive: Trading magnate Schonfeld to take outside capital". Reuters. October 21, 2015. Retrieved January 15, 2023.
  9. ^ a b c d "Last Man Standing". Forbes. Retrieved January 15, 2023.
  10. ^ a b c d e Lucchetti, Aaron (August 12, 2009). "Wall Street's B-List Firms Trade on Bigger Rivals' Woes". Wall Street Journal. Retrieved January 15, 2023.
  11. ^ a b c Editorial Staff (February 1, 2004). "The Return of The Day Trader: But Is Another Disaster Around the Corner?". Traders Magazine. Retrieved January 15, 2023.
  12. ^ "Quantbot hunts for brainpower to feed quantitative model". Financial Times. October 16, 2016. Retrieved January 15, 2023.
  13. ^ Ewing, Terzah (December 23, 1999). "Securities Firm Gets Hit With Fine For Violating Day-Trading Rules". WSJ. Retrieved January 15, 2023.
  14. ^ "Schonfeld Fined for Trades to Hide Capital Shortfalls". Bloomberg.com. January 7, 2009. Retrieved January 15, 2023.
  15. ^ a b "Hedge fund Folger Hill to merge with Schonfeld". Reuters. April 11, 2018. Retrieved January 15, 2023.
  16. ^ a b "Schonfeld Strategic Advisors to acquire Folger Hill Asset Management". Pensions & Investments. April 11, 2018. Retrieved January 15, 2023.
  17. ^ a b "Folger Hill Hedge Fund Teams Up With Schonfeld for Asia Push". Bloomberg.com. November 6, 2016. Retrieved January 15, 2023.
  18. ^ "Schonfeld Plans New Florida Hub as Hedge Funds Move South". Bloomberg Tax. August 17, 2021.
  19. ^ "Billionaire's Hedge Fund Offers Hefty Pay to Combat Talent Squeeze". Bloomberg.com. June 15, 2021. Retrieved June 20, 2023.
  20. ^ Agnew, Harriet; Aliaj, Ortenca (October 6, 2023). "How Schonfeld fell into Millennium's embrace". Financial Times. Retrieved October 16, 2023.
  21. ^ "Schonfeld Cuts 15% of Staff After Exiting Millennium Talks". Bloomberg.com. November 16, 2023. Retrieved November 18, 2023.
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