Former New Jersey governor and disgraced CEO of now defunct broker-dealer MF Global Jon “I Simply Do Not Know Where The Money Is” Corzine might be starting a hedge fund, DealBook’s Azam Ahmed and Ben Protess reported.
Mr. Corzine, in a bid to rebuild his image and engage his passion for trading, is weighing whether to start a hedge fund, according to people with knowledge of his plans. He is currently trading with his family’s wealth.
If he is successful as a hedge fund manager, it would be the latest career comeback for a man who was ousted from both the top seat at Goldman Sachs and the New Jersey governor’s mansion.
So is this possible?
We spoke with a third party marketer/hedge fund industry source, who spoke anonymously, to get his take on Corzine considering launching a hedge fund after he made MF Global go belly up.
“He’s got to do something. He’s probably bored. He’s got a lot of money and either he’s going to manage it or someone else has to manage it,” the source said.
Our source thinks the money for the fund will likely come from Corzine and his friends.
“He could put his own money. I’m sure he has very good friends he could get money from.”
That being said, the TPM thinks it would be unlikely that pension funds, endowments, foundations, fund of funds, family offices, sovereign wealth funds, etc. would want to invest with Corzine. At least, not right away.
“If he’s the portfolio manager, money will come from people he’s good friends with. I don’t think unaffiliated investors would allocate to him if he’s the portfolio manager. This business is so competitive, why would they? What does he bring to the table outside being a very famous, smart guy?”
While the TPM thinks independent people aren’t going to be allocated to him initially, it’s possible in a few years if he puts up a track record he could get them to invest.
“No public fund is going to want to go there. I don’t think they’d want to go there. Why would they when you have 10,000 funds to choose from? What does he bring tot he table? There’s a lot of people who have long track records, spinning out of prop desks, I don’t think he has any of that.”
That’s not just because of the whole MF Global disaster either, the TPM explained.
“If he didn’t have the issues, I think it would still be difficult for him to raise money from investors because I don’t know what type of historical track record he could point to. Obviously, he’s spent a lot of time in senior management. From that perspective, I think it would be hard for him to raise money. He maybe could get money from people he knows. He knows a lot of people.”
The source added, “Being chair of Goldman, I don’t think that necessarily gives him a brand. It doesn’t give him a brand as being a good hedge fund manager. If he was on the prop desk and he left the prop desk–that’s a strong brand.”
To be fair, Corzine does have supporters and experience as a trader.
Business Insider’s Linette Lopez spoke with Anthony Scaramucci, the managing partner of Skybridge Capital, who worked under Corzine while at Goldman. Scaramucci told Business Insider that he considers Corzine a “trader and a gentleman.”
Corzine joined Goldman Sachs in 1975 as a bond trader. He quickly worked his way up the ranks to vice president, general partner, co-head of fixed income, senior partner and eventually chairman and CEO until he left in 1999.
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