Princeton Newport Partners
Encyclopedia
Princeton/Newport Partners was an early alternative investment management company founded by pioneering mathematical financier Edward O. Thorp
Edward O. Thorp
Edward Oakley Thorp is an American mathematics professor, author, hedge fund manager, and blackjack player. He was a pioneer in modern applications of probability theory, including the harnessing of very small correlations for reliable financial gain.He was the author of Beat the Dealer, the first...

 in late 1974. The company was developed by assuming the instruments of an earlier venture, Convertible Hedge Associates
Convertible Hedge Associates
Convertible Hedge Associates was an early alternative investment management company founded by Edward O. Thorp and a partner, Jay Regan, in November 1969. Based in Long Beach, CHA was said by Thorp to have been the first market-neutral hedge fund...

. The CHA-PNP venture is said to have achieved annualized returns of 15.1 percent after fees until becoming embroiled in the junk bond schemes of Michael Milken
Michael Milken
Michael Robert Milken is an American business magnate, financier, and philanthropist noted for his role in the development of the market for high-yield bonds during the 1970s and 1980s, for his 1990 guilty plea to felony charges for violating US securities laws, and for his funding of medical...

's circle at Drexel Burnham Lambert
Drexel Burnham Lambert
Drexel Burnham Lambert was a major Wall Street investment banking firm, which first rose to prominence and then was forced into bankruptcy in February 1990 by its involvement in illegal activities in the junk bond market, driven by Drexel employee Michael Milken. At its height, it was the...

. Thorp and other principals at P/NP were eventually cleared of wrongdoing, but the financial burdens imposed by the ensuing RICO
RICO
-Music:*Rico , a 2000 album by Matt Bianco*"Rico" , a 1998 song the Matthew Good Band from the album Underdogs*Rico International, a manufacturer of reeds, mouthpieces, and woodwind accessories...

 investigation forced P/NP to liquidate. Thorp and his circle later regrouped as Edward O. Thorp & Associates.
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