Schonfeld Strategic Advisors

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 Strategic Advisors LLC
Schonfeld Group
TypePrivate
IndustryFinancial services
Founded1988 (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
900 (2022)[2]
SubsidiariesQuantbot Technologies
Websitewww.schonfeld.com
Footnotes / references
[3]

Schonfeld registered as an investment advisor with the SEC in January 2016.[6] Ryan Tolkin serves as CEO and CIO.[7]

History

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]

Schonfeld Strategic Advisors (2015-Present)

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.[13][14][15] One of the reasons for the acquisition was to help Schonfeld expand in Asia.[13][14][15]

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.[16]

In January 2022, Schonfeld established its Discretionary Macro & Fixed Income business.[17]

In October 2023, it was reported that Schonfeld and Millennium Management were in talks to establish a partnership where Millennium would invest in Schonfeld.[18]

Regulatory issues

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][19]

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][20] According to The Wall Street Journal, as of 2015, financial regulators have taken action against Schonfeld 16 times.[10]

References
  1. "Schonfeld Strategic Advisors fund doubles size of Wynwood office". South Florida Business Journal. 23 February 2023.
  2. 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. "Hedge fund expected to hire around 40 people for new macro fund". eFinancialCareers. 1 June 2021.
  5. "Homebody in a Hoodie: Hedge Fund Founder Builds Quant Paradise". Bloomberg.com. 2019-12-03. Retrieved 2023-01-15.
  6. "Investment Adviser Firm Summary". SEC. 31 December 2015.
  7. "Meet Ryan Tolkin, the 34-year-old behind Schonfeld's transformation from family office to hedge fund heavyweight". Business Insider. 22 July 2021.
  8. "Exclusive: Trading magnate Schonfeld to take outside capital". Reuters. 2015-10-21. Retrieved 2023-01-15.
  9. "Last Man Standing". Forbes. Retrieved 2023-01-15.
  10. Lucchetti, Aaron (12 August 2009). "Wall Street's B-List Firms Trade on Bigger Rivals' Woes". Wall Street Journal. Retrieved 2023-01-15.
  11. Editorial Staff (2004-02-01). "The Return of The Day Trader: But Is Another Disaster Around the Corner?". Traders Magazine. Retrieved 2023-01-15.
  12. "Quantbot hunts for brainpower to feed quantitative model". Financial Times. 2016-10-16. Retrieved 2023-01-15.
  13. "Hedge fund Folger Hill to merge with Schonfeld". Reuters. 2018-04-11. Retrieved 2023-01-15.
  14. "Schonfeld Strategic Advisors to acquire Folger Hill Asset Management". Pensions & Investments. 2018-04-11. Retrieved 2023-01-15.
  15. "Folger Hill Hedge Fund Teams Up With Schonfeld for Asia Push". Bloomberg.com. 2016-11-06. Retrieved 2023-01-15.
  16. "Schonfeld Plans New Florida Hub as Hedge Funds Move South". Bloomberg Tax. 17 August 2021.
  17. "Billionaire's Hedge Fund Offers Hefty Pay to Combat Talent Squeeze". Bloomberg.com. 2021-06-15. Retrieved 2023-06-20.
  18. Agnew, Harriet; Aliaj, Ortenca (2023-10-06). "How Schonfeld fell into Millennium's embrace". Financial Times. Retrieved 2023-10-16.
  19. Ewing, Terzah (December 23, 1999). "Securities Firm Gets Hit With Fine For Violating Day-Trading Rules". WSJ. Retrieved 2023-01-15.
  20. "Schonfeld Fined for Trades to Hide Capital Shortfalls". Bloomberg.com. 2009-01-07. Retrieved 2023-01-15.
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