The largest property sale in Chicago since March 2007 just landed Joe Nicholas a new $8.5 million property in Lincoln Park (photo below).
Nicholas, who bought the property in August, founded Hedge Fund Research and owns the HFR group of companies, which created just about all of the non-investable hedge fund indexes that are followed regularly by hedge fund investors.
Apparently it’s a great business!
No wonder Dow Jones, Barclays, and Credit Suisse all have their own hedge fund indexes.
One HFR’s biggest successes is the HFRI Fund Weighted Composite Index, the index that is widely accepted as the standard measure for hedge fund performance globally.
But the real money might be in HFRAM, Nicholas’ fund of funds business, the managed account platform developed by the HFR Group, HFR Asset Management.
One of HFRAM’s biggest pay days came in 2007 (fifteen years after HFR was founded in 1993, four years after HFRAM was founded in 2003), when Nomura tried to buy it.
Nomura really wanted the platform because it would “allow Nomura to avoid Basel II implementation-related risk and transparency issues forcing many Japanese banks to review—read, dump—their hedge fund, and fund of hedge fund, investments,” according to HFM Week (paraphrased here).
The firm ended up reaching a different agreement with HFR whereby Nomura would have “exclusive rights to distribute certain funds of hedge funds managed by HFRAM in Japan.” That sounds like a compromise that benefitted HFRAM.
HFRAM has offices in Chicago, London, and Tokyo, now so the Tokyo office probably does most of the work with Nomura.
Here’s what Nicholas said at the time:
“By collaborating with Nomura, we can expect to see more investment flow from Asia including Japan, as investors learn of the safer, more transparent, and highly liquid hedge fund investments of HFRAM. We decided to team up with Nomura because of their unparalleled presence across Asia.”
In any case, Nicholas had the perfect platform to start a fund of funds investment advisory firm, so its not surprising that its a bombshell and he’s able to afford a fantastic new house.
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