Nick Maounis's Verition Fund Management had one of the more noteworthy performances this year. Including April, the Verition Multi-Strategy Fund returned 8.37% YTD. Since inception in 2008, the fund has returned 13% annualized - with no losing year. Verition manages a bit over a billion out of Greenwich, Connecticut. But don't worry, I am not getting fancy - Nick Maounis and Verition have important connections to Canada.
Most notoriously, Nick's previous firm, Amaranth once had the misfortune of employing a young Canadian trader, Brian Hunter. The firm lost $6 billion in a matter of weeks over a natural gas bet he made and had to shut down. Brian Hunter got something like $100 million in compensation the preceding year. I don't know what Calgarian Brian Hunter is doing these days.
Nick Maounis started working on Verition months after the Amaranth collapse - a sign of how forgiving the industry is. The firm started with $250 million and grew slowly with limited marketing. Risk controls appear to have improved, the fund was up 20% in 2008 and up 3.75% in March of this year. I took a look at one of their regulatory documents and it lists the option of using pretty much every liquid strategy under the sun, including seeding other managers. But you will be relieved to know that it doesn’t invest in natural gas.
This time around, Verition made money on global credit and event-driven volatility and risk arbitrage strategies. Nick Maounis was originally a convertible arbitrage trader for multi-strategy shop Paloma Partners. Paloma has been a long-standing but under-the-radar player in Canadian markets. For example, it put Greg Boland in business. Paloma and Verition are next to each other in Greenwich, so presumably, both firms are close.
Verition is also active in Canadian markets, employing a trader in Toronto who also came out of Paloma. His focus is convertible arbitrage, credit trading, long/short equity, and volatility trading. He’s also a bit of a Greek legend.