Roy Niederhoffer
Encyclopedia
Roy Gary Niederhoffer is an American hedge fund
manager and philanthropist. Since Niederhoffer founded R. G. Niederhoffer Capital Management, Inc. in 1993, his funds have been noted for their strong performance in difficult periods. The R. G. Niederhoffer Diversified Program, is reported to have returned +60% in 2000, +51% in 2008, and overall, have had strong long-term returns over +17% annualized return from 1999 through March 2009). His firm’s assets under management
were reported to be $943 million as of August 2010.
. His father, Arthur Niederhoffer (1917–1981) was a professor of Sociology at John Jay College of Criminal Justice
, the influential author of several books on the police and criminology such as “Behind the Shield,” “The Ambivalent Force,” and “The Police Family” as well as a 20 year veteran of the New York City Police Department
. His mother, Elaine Niederhoffer (1925–2006) was an English teacher, author, and editor.
At age 13, he and a classmate founded a company called Software Innovations, which sold computer games such as Alien Invasion for the TRS-80
microcomputer.
In 1982, when Niederhoffer was 16, the firm changed its name to Microvations, Inc., soon thereafter employed over 30 people, mostly his classmates, and produced over 450 individual titles by 1983. Though the company closed when Niederhoffer left for college at Harvard, his interest in computers continued.
and Harvard College
, from which he graduated magna cum laude in 1987 with a BA in Computational Neuroscience
.
, from 1987 to 1992. Victor Niederhoffer is known for training other successful hedge fund manager such as Monroe Trout
, Paul Buethe, and Toby Crabel
. Roy Niederhoffer left his brother’s firm in 1992, opening R. G. Niederhoffer Capital Management, Inc. in 1993.
Articles state that his computer models make thousands of individual trades per year that last between several hours to a week, occasionally longer, and are active in many individual stocks, equity index futures, fixed income, commodities, and foreign exchange. His firm was noted for strong performance during the financial crisis of 2007-2010.
, and with them has performed in venues such as Carnegie Hall
, Avery Fisher Hall
and Alice Tully Hall
. He is also an avid classical and jazz pianist, and is reportedly able to play almost any song by ear on piano. He also plays several other instruments.
Niederhoffer is the Executive Producer
of the Flying Karamazov Brothers currently playing Off-Broadway.
, The Harmony Program, and Concert Artists Guild
, and has been on the board of the Kaufman Center
(consisting of the Special Music School
, Lucy Moses School and Merkin Concert Hall
).
He also has created the Niederhoffer Foundation, which is active in music education, Jewish causes, and aid to the needy.
and clinical psychologist Diane Klein, the son of sociology professor and author Arthur Niederhoffer and author Elaine Niederhoffer and the uncle of director and author Galt Niederhoffer
and musician Amy Klein.
Hedge fund
A hedge fund is a private pool of capital actively managed by an investment adviser. Hedge funds are only open for investment to a limited number of accredited or qualified investors who meet criteria set by regulators. These investors can be institutions, such as pension funds, university...
manager and philanthropist. Since Niederhoffer founded R. G. Niederhoffer Capital Management, Inc. in 1993, his funds have been noted for their strong performance in difficult periods. The R. G. Niederhoffer Diversified Program, is reported to have returned +60% in 2000, +51% in 2008, and overall, have had strong long-term returns over +17% annualized return from 1999 through March 2009). His firm’s assets under management
Assets under management
Assets under management is a financial term used denote the market value of funds being managed by a financial instutition on behalf of its clients, investors, depositors, etc. This metric is a sign of size and success against competition...
were reported to be $943 million as of August 2010.
Early life
Niederhoffer was raised in Great Neck, New YorkGreat Neck, New York
The term Great Neck is commonly applied to a peninsula on the North Shore of Long Island, which includes the village of Great Neck, the village of Great Neck Estates, the village of Great Neck Plaza, and others, as well as an area south of the peninsula near Lake Success and the border of Queens...
. His father, Arthur Niederhoffer (1917–1981) was a professor of Sociology at John Jay College of Criminal Justice
John Jay College of Criminal Justice
The John Jay College of Criminal Justice is a senior college of the City University of New York in Midtown Manhattan, New York City and is the only liberal arts college with a criminal justice and forensic focus in the United States. The college offers programs in Forensic Science and Forensic...
, the influential author of several books on the police and criminology such as “Behind the Shield,” “The Ambivalent Force,” and “The Police Family” as well as a 20 year veteran of the New York City Police Department
New York City Police Department
The New York City Police Department , established in 1845, is currently the largest municipal police force in the United States, with primary responsibilities in law enforcement and investigation within the five boroughs of New York City...
. His mother, Elaine Niederhoffer (1925–2006) was an English teacher, author, and editor.
At age 13, he and a classmate founded a company called Software Innovations, which sold computer games such as Alien Invasion for the TRS-80
TRS-80
TRS-80 was Tandy Corporation's desktop microcomputer model line, sold through Tandy's Radio Shack stores in the late 1970s and early 1980s. The first units, ordered unseen, were delivered in November 1977, and rolled out to the stores the third week of December. The line won popularity with...
microcomputer.
In 1982, when Niederhoffer was 16, the firm changed its name to Microvations, Inc., soon thereafter employed over 30 people, mostly his classmates, and produced over 450 individual titles by 1983. Though the company closed when Niederhoffer left for college at Harvard, his interest in computers continued.
Education
Niederhoffer attended Great Neck South High SchoolGreat Neck South High School
William A. Shine Great Neck South High School is an American top public four-year high school. It is located in Lake Success, serving students in grades 9 through 12. However, GNSHS is officially listed in Great Neck...
and Harvard College
Harvard University
Harvard University is a private Ivy League university located in Cambridge, Massachusetts, United States, established in 1636 by the Massachusetts legislature. Harvard is the oldest institution of higher learning in the United States and the first corporation chartered in the country...
, from which he graduated magna cum laude in 1987 with a BA in Computational Neuroscience
Computational neuroscience
Computational neuroscience is the study of brain function in terms of the information processing properties of the structures that make up the nervous system...
.
Career
Following university, Niederhoffer worked for his brother, hedge fund manager Victor NiederhofferVictor Niederhoffer
Victor Niederhoffer is a hedge fund manager, champion squash player, bestselling author and statistician.Victor Niderhoffer was born in Brooklyn to a Jewish family. His father, Arthur, graduated from Brooklyn Law School but went to work in the police. Victor’s mother, Elaine was a teacher....
, from 1987 to 1992. Victor Niederhoffer is known for training other successful hedge fund manager such as Monroe Trout
Monroe Trout
Monroe Trout, Jr. is a retired financial speculator and hedge fund manager profiled in the book New Market Wizards by Jack D. Schwager. His father is Monroe E. Trout, Chairman Emeritus of American Healthcare Systems....
, Paul Buethe, and Toby Crabel
Toby Crabel
William "Toby" Harrison Crabel is a United States self-made millionaire commodities trader. The Financial Times called Crabel "the most well-known trader on the counter-trend side" He is the fund manager of "Crabel Capital Management". Crabel Capital Management ranked number 101 out of 196 funds...
. Roy Niederhoffer left his brother’s firm in 1992, opening R. G. Niederhoffer Capital Management, Inc. in 1993.
Business and Trading Strategy
Niederhoffer has been attributed to employ an investment strategy known as short-term trading. According to reports, Niederhoffer’s computerized trading models are able to profit from the presence of cognitive biases in the human brain, which cause investors and also the models they create to behave predictably.Articles state that his computer models make thousands of individual trades per year that last between several hours to a week, occasionally longer, and are active in many individual stocks, equity index futures, fixed income, commodities, and foreign exchange. His firm was noted for strong performance during the financial crisis of 2007-2010.
Awards
- The Roy G. Niederhoffer Negative Correlation Fund was the Absolute Return Managed Futures Fund of the year in 2008, when it returned 55%, and the Diversified Fund Offshore was also nominated for its 2008 performance of 51%.
- The R. G. Niederhoffer Diversified Fund Offshore was the HFM Week Managed Futures Fund of the year in 2008.
- R. G. Niederhoffer Capital Management, Inc. was Futures Magazine Top Trader of 2000.
- The R. G. Niederhoffer Diversified Fund Offshore was ranked #9 of the top 100 Hedge Funds by Barrons in 2009 and #42 in 2010.
- Roy Niederhoffer was named one of the top hedge fund earners of the year by Absolute Return Magazine for 2008.
- Roy Niederhoffer was a Futures Magazine “Top Trader of 2000.”
Musical and Theatre Pursuits
Niederhoffer is a violinist with the Park Avenue Chamber SymphonyPark Avenue Chamber Symphony
The Park Avenue Chamber Symphony is a classical symphony orchestra that serves New York City communities by producing orchestral and chamber music concerts of the highest artistic level...
, and with them has performed in venues such as Carnegie Hall
Carnegie Hall
Carnegie Hall is a concert venue in Midtown Manhattan in New York City, United States, located at 881 Seventh Avenue, occupying the east stretch of Seventh Avenue between West 56th Street and West 57th Street, two blocks south of Central Park....
, Avery Fisher Hall
Avery Fisher Hall
Avery Fisher Hall is a concert hall, in New York City and is part of the Lincoln Center for the Performing Arts complex. It is the home of the New York Philharmonic, with a capacity of 2,738 seats.-History:...
and Alice Tully Hall
Alice Tully Hall
Alice Tully Hall is a concert hall at the Lincoln Center for the Performing Arts in New York City. It is named for Alice Tully, a New York performer and philanthropist whose donations assisted in the construction of the hall...
. He is also an avid classical and jazz pianist, and is reportedly able to play almost any song by ear on piano. He also plays several other instruments.
Niederhoffer is the Executive Producer
Executive producer
An executive producer is a producer who is not involved in any technical aspects of the film making or music process, but who is still responsible for the overall production...
of the Flying Karamazov Brothers currently playing Off-Broadway.
Philanthropy
Niederhoffer currently serves on the boards of trustees of several cultural institutions, such as the New York City OperaNew York City Opera
The New York City Opera is an American opera company located in New York City.The company, called "the people's opera" by New York Mayor Fiorello La Guardia, was founded in 1943 with the aim of making opera financially accessible to a wide audience, producing an innovative choice of repertory, and...
, The Harmony Program, and Concert Artists Guild
Concert Artists Guild
The Concert Artists Guild is an American musical institution, based in New York City and established in 1951. It is dedicated to discovering and nurturing musical talent and helping musicians start careers...
, and has been on the board of the Kaufman Center
Kaufman Center
Kaufman Center is a notable performing arts complex in New York City that houses Lucy Moses School, the Special Music School, and Merkin Concert Hall. Originally known as the Hebrew Arts School, it was founded in 1952 and is currently located on West 67th Street between Broadway and Amsterdam...
(consisting of the Special Music School
Special Music School
The Special Music School , or SMS, is a unique New York public school for musically gifted children. The school is run as a public/private partnership between the New York City Department of Education and Kaufman Center, a not-for-profit, multi-arts organization...
, Lucy Moses School and Merkin Concert Hall
Merkin Concert Hall
Merkin Concert Hall is a 449-seat concert hall in Manhattan, New York City. The hall, named in honor of Hermann and Ursula Merkin, is part of the Kaufman Center, a complex that includes the Lucy Moses School, a community arts school, and the Special Music School , a New York City public school for...
).
He also has created the Niederhoffer Foundation, which is active in music education, Jewish causes, and aid to the needy.
Family
Niederhoffer is the brother of hedge fund manager Victor NiederhofferVictor Niederhoffer
Victor Niederhoffer is a hedge fund manager, champion squash player, bestselling author and statistician.Victor Niderhoffer was born in Brooklyn to a Jewish family. His father, Arthur, graduated from Brooklyn Law School but went to work in the police. Victor’s mother, Elaine was a teacher....
and clinical psychologist Diane Klein, the son of sociology professor and author Arthur Niederhoffer and author Elaine Niederhoffer and the uncle of director and author Galt Niederhoffer
Galt Niederhoffer
Galt Niederhoffer is an American movie producer and novelist.Her movie credits as a producer include Prozac Nation , Lonesome Jim , The Baxter and Grace Is Gone...
and musician Amy Klein.