Caxton Outsources Assets to Commodity Shop

Matthews said that investors will not be charged a double layer of fees. Caxton will simply give Matthews a cut of the performance and management fees it collects from investors who have assets in the allocation that's separately managed. It may be easier for Caxton to redistribute a part of its payout to an outside trader, as it has one of the highest fee structures in the industry, having recently raised its management fee to 3% from 2%. A 2% management fee is standard among hedge funds.

It is unclear whether this is the first time Caxton has outsourced assets. "It is my impression that they've done it before, but in a smaller kind of allocation," said Matthews.

Monique Miller, director of Caxton's strategic quantitative division, said in a news release, "We are very happy to have concluded this deal with someone of Peter Matthews' reputation, track record and proven quantitative skills." She did not return a call seeking further comments.

Optimation was created at the end of 2003 by Matthews, a hedge fund pioneer with 20 years experience in the industry. Matthews was a founding partner of Mint Investment Management, a CTA that was 50% owned by the Man Group.

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