Bio and Background of Bruce Kovner
70 year old Bruce Kovner was born Brooklyn, New York, 1945. His parents were of Russian- Jewish origin who immigrated to Brooklyn, in the early 1900s from Russia. His family moved to America fleeing persecution for their left-wing and atheist beliefs.
Growing up Bruce spent much of his life at San Fernando Valley, where his father had moved the family in 1953. Bruce showed early signs of success early in his childhood. He became a merit scholar and was a student body president at Van Nuys High school where he schooled and was a pianist.
In 1962, he joined Harvard College to study political economy. He narrowly escaped the Vietnam draft system at the time that picked and assigned civilians military assignments to Vietnam during the war.
He managed to stay at Harvard and complete his degree. One of his tutors was prominent conservative scholar Edward C. Banfield, who reportedly had great faith and admiration for Kovner.
Unfortunately, Bruce Kovner did not finish his Ph.D. He instead took a break from school to engage in political campaigns, studied literature and even at some point became a cab driver. It was during his cab driving days that 27 year old Bruce discovered investment opportunities in commodities trading.
Apart from Caxton Associates which he formed in 1983, Bruce Kovner owns other lucrative businesses in pharmaceuticals (syntax pharmaceuticals) and shipping industry. He formed Caxton Alternative Management LP in 2012 to assist Caxton associates handle investment, trading and other business ventures.
Although not popularly known outside the investment world, Bruce is a great businessman who has a respected name in the trading industry. As of 2014, he had an estimated net worth of around $4.8 billion, joining the list of one of the wealthiest people in America. He is a leading philanthropist to charities around the world.
Bruce Kovner’s first trade was in 1977 when he bought soybean futures contracts worth $3000. This investment grew for a while to $43,000 and then dropped to about $20,000. He decided to sell it then fearing the price might drop even further. Losing more than 50% of his profit very quick, taught him his first lesson in risk management which he remembers to date.
He later joined Commodities Corporation as a trader and trained under Michael Marcus, a renowned investment manager. Having learnt his lesson trading soybeans, Bruce employed innovative strategies that earned him millions in the first few years at the firm. This gained him quite some respect and made him a name as a trader.
In 1983, he left Commodities Corporation to venture into a solo career. He made his dreams come true when he established Caxton Associates the same year. The company has been very successful over the years. At its peak it reportedly managed $14 billion in capital.
Bruce is a well known philanthropist. He is a well known lover of art, being an avid collector of classical books, pieces of art and an Opera enthusiast. It is estimated that he has given millions to art projects and institutions over the years. Most notable is the Juilliard School to which he donated $20 millon in 2012 to support historical performances in its graduate program.
He funded the expansion of the Lincoln centre and even the translation and printing of bible editions. Other than that Bruce founded the School choice scholarships which give financial support to disadvantaged students in New York City.
Bruce Kovner has close links with Nick Cheney, Richard Perle and other political leaders around the world. He was once the chairman of board of trustees of American enterprise institute, a position that garnered him great networks in the business and political ranks. In 2012, Bruce greatly contributed to Mit Romney’s presidential campaign.
All these relationships have greatly contributed to these relationships and networks in business and ultimately to his insight in the commodities market.
Well known as a global leader in world market research and economic analysis, Caxton Associates has come a long way since it was founded by Bruce Kovner in 1983. 31 years later, the global macro hedge fund is headquartered in New York City and has branches in London, Sydney, and Princeton, New Jersey.
In 2008, the firm underwent structural transition when founder Bruce Kovner appointed Andrew Law as the Chief investment Officer. Andrew is the Managing Director and head of FICC proprietary at GoldmanSachs trading in London. Later on in 2011, following the retirement of Bruce from Caxton Associates, Andrew took over as the chairman, Chief executive officer and general controlling partner of the company.
Before embarking on a solo venture as establishing Caxton Associates, Bruce Kovner once worked at Commodities Corporation which is now part of Goldman Sachs International. He was trained under Michael Marcus whom to date is a renowned hedge manager.
2008 Financial Crisis
Caxton Associates was one of the hardest hit investment firms by the 2008 financial crisis. The firm had made a mistake of not freezing investor capital in their Caxton Global investment Fund. This resulted in redemption of a great amount of client assets. 27% of the assets under management were affected that year, only 13% were recovered. The recovered redemptions had reportedly been strapped or frozen at other investment management companies.
By 2010, the firm had reportedly returned $12.8 billion to clients, yet they were managing only $6 billion.
As a global leader in macro analysis and trading, Caxton Associates has one of the best investment strategies in the market. In an interview with the financial times in 2013 Chief Executive officer Andrew Law stated that their strategy was driven by three core principles:
• Listen to the markets
• Politics and policy matters
• Risk control
The strategy seems to be working as LCH investments reported that Caxton Associates has generated more than $13bn for its clients since its inception in 1983.