FrontPoint hires equity arbitrage strategy team

US investment management firm FrontPoint Partners has hired a three-man quantitative equity arbitrage team aimed at developing an investment strategy generating low volatility absolute returns using liquid and risk-controlled methodologies.

The team comprises Stuart Bohart from Morgan Stanley, Michael Gray from Barlcays Global Investors and Thomas Felgner, formerly with Bank of America.

Bohart was a New York-based managing director at Morgan Stanley, responsible for risk management at the firm's prime brokerage and stock loan businesses. He previously held portfolio management positions at Morgan Stanley Asset Management, Bankers Trust in London and Harvard Management.

Gray previously served as a strategist at Barclays Global Investors in San Francisco, where he oversaw the research and execution of several of the firm's market-neutral and enhanced-equity strategies. He has also worked in the quantitative group at Bankers Trust.

Felgner, meanwhile, was a member of the convertible bond arbitrage team at Banc of America Securities and previously held a similar position at Lehman Brothers.

The team will employ quantitative and fundamental-based market-neutral strategies, including statistical arbitrage, convertible arbitrage, volatility arbitrage, and other relative-value strategies. These are intended to extract 'structural alpha' embedded in various equity capital markets."We are currently in discussions with other potential FrontPoint teams and are on track to reach our objective of offering investors 15 to 20 scaleable strategies over the next several years," said FrontPoint founding partner Philip Duff.

FrontPoint was founded in November 2000 by Duff and Gil Caffray, both former Tiger Management executives, and Paul Ghaffari, previously with Soros Fund Management. The firm specialises in offering risk-adjusted absolute returns uncorrelated to broad market indexes.