Caxton Outsources Assets to Commodity Shop

In an unusual move, Caxton Associates, the behemoth hedge fund shop founded by Bruce Kovner, will outsource some of its assets to a commodity trading adviser.

Optimation Investment Management of Potomac Falls, Va., says it signed an agreement with Caxton to manage a "significant" allocation of the global macro manager's funds.

Why would Caxton, one of the largest U.S. hedge funds, cede oversight of client assets to an outside entity? The main reason is capacity constraint, which, over time, can kill healthy returns. ...