Bruce Kovner а legendary trader

Bruce Stanley Kovner (born 1945 in The Bronx, New York) is an American businessman. He is the founder and chairman of Caxton Associates, a hedge fund that trades a global macro strategy and is considered amongst the world’s top and largest 10 hedge funds with an estimated $14 billion under management. In March 2011, Kovner had an estimated net worth of around $4.5 billion.

Described as secretive even by family and friends, the divorcee is perhaps one of the least known New York City billionaires outside of professional circles. His company Caxton Associates, despite the large amount of assets under management, is known to be amongst the top 25 most enigmatic and secretive hedge funds globally. He is a leading philanthropist and former chairman of American Enterprise Institute.

Kovner was born into a Russian Jewish family who immigrated to Brooklyn, New York, in the early 1900s from Tsarist Russia, fleeing persecution for their left-wing and atheist beliefs. Two of Kovner’s father’s cousins faced the House Un-American Activities Committee in the 1950s, pleading the Fifth Amendment. However, Bruce’s father, Moishe Kovner, was more conservative than his kin, at one point even crossing a picket line to work.

Bruce Kovner grew up in the San Fernando Valley, where his father had moved the family in 1953. Early on, he was a high achiever, becoming a Merit Scholar. He was the student-body president of Van Nuys High School at 16, and an accomplished basketball player and pianist.

Kovner went to Harvard College starting in 1962, a time marred by the hanging suicide of his mother back in his family’s Van Nuys home in 1965. Nonetheless, he was considered a good student and was well liked by his classmates. Avoiding the Vietnam draft by student deferment (when it was still available), Kovner stayed at Harvard, studying political economy at the John F. Kennedy School of Government, notably under prominent conservative scholar Edward C. Banfield, who reportedly had great faith and admiration for the young Kovner.

Kovner did not finish his Ph.D., having suffered a severe case of writer’s block and overreached in his choice of subject matter. Over the next few years, he engaged in a number of eclectic efforts; he worked on political campaigns, studied the harpsichord, was a writer, and a cab driver. It was during the latter occupation, not long after his marriage to now ex-wife Sarah Peter, that he discovered commodities trading.

Kovner’s first trade was in 1977 for $3,000, borrowed against his MasterCard, in soybean futures contracts. Realizing growth to $40,000, he then watched the contract drop to $23,000 before selling. He later claimed that this first, nerve-racking trade taught him the importance of risk management.

In his eventual role as a trader under Michael Marcus at Commodities Corporation (now part of Goldman Sachs), he purportedly made millions and gained widespread respect as an objective and sober trader. This ultimately led to the establishment of his current company, Caxton Associates, in 1983, which at its peak managed over $10 billion in capital and has been closed to new investors since 1992. Kovner is a director of Synta Pharmaceuticals since 2002.

Kovner’s main Caxton Global Investment fund has returned an average of 21 percent a year since inception, compared with an average gain of 11 percent including dividends by the Standard & Poor’s 500 Index. The $7 billion fund had one losing year, in 1994, when it fell 2.5 percent. Since 1983, the S&P has fallen in five calendar years, including a 37 percent decline in 2008. The top returns have helped Kovner amass a fortune estimated at $4.5 billion, according to Forbes magazine.

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