“When we ran third-party money briefly, it always surprised Steven and me how focused investors really are on month-to-month returns,” said Andrew Fishman, president of the family office. “Our view was after managing investors’ money for a few years, we’d rather just go back and manage Steven’s money because he’s thinking long term and that allows us to think long term.”
Round Trip
In 2008, the firm faced regulatory claims that it used round-trip trades to make up capital shortfalls.Schonfeld and his firm paid $1.1 million to settle allegations that they neither admitted nor denied.Schonfeld was suspended from supervisory activities for 90 days.
One advantage of the current structure is that the funds are responsible for their own compliance and issues at one won’t affect other teams, Tolkin said.
Schonfeld’s firm plans on adding three to five teams a year out of the hundreds that seek to manage his money. The push will diversify his company and boost returns beyond what he could find with a more conventional model, he said.
“We feel so confident we can well, well outperform versus doing it the other way,” Schonfeld said. “We bet on ourselves.”