TGS Management

American quantitative hedge fund

TGS Management Company, LLC

Company type| Private company
Industry| Investment management
Founded| 1989; 36 years ago (1989)
Founders|

* Frederick Taylor
* David Gelbaum
* Andrew Shechtel

Headquarters|

Irvine, California

United States[1]

Products| Hedge funds
Quantitative finance
Website| www.tgsmc.com

TGS Management (TGS) is an American quantitative investment management firm founded in 1989 that has offices in Irvine, California and Princeton, New Jersey.[2] It is known to maintain a very low profile.

## History

[edit]

In 1989, TGS was founded by Frederick Taylor, David Gelbaum and Andrew Shechtel.[3][4][5] The name of the firm comes from the starting letters of its three founders' surnames.[5] The three of them previously worked at Princeton-Newport Partners (PNP), the world's first quantitative hedge fund that was founded in 1969 by Edward O. Thorp.[3][5][6] In December 1988, PNP closed due to financial burdens imposed by a Racketeer Influenced and Corrupt Organizations Act investigation.[3][5][6] The three founders of TGS were not accused of any wrongdoing and after they started TGS, they kept many former PNP employees and investors.[3]

When TGS started trading, it pursued a form of statistical arbitrage and within a few years, it had made enough to return money to most of its outside investors.[3][4] As it no longer needed to solicit outsiders for capital, the firm had more flexibility on pursuing its own investment strategies without needing to disclose them.[3][4] In late 1990s, TGS briefly appeared in the news where it mounted an arbitrage campaign against several closed-end funds under the Scottish Investment Trust.[3][7] At least one fund was forced to dissolve leading to the British media dubbing the firm a "secretive U.S. vulture fund".[3][7] At the time TGS was operating under the name Sierra Trading Group, L.P.[7][8]

The Real Deal reported that TGS has been acquiring land and office space in Irvine.[9] As of February 2023, TGS owns more than 60 acres in Irvine.[9]

TGS is known to be highly selective and hires individuals from quantitative backgrounds which include software engineers and PhDs.[3][4] The Wall Street Journal reported that TGS outbid Renaissance Technologies and Citadel LLC to hire a International Mathematical Olympiad gold medalist for $700,000 a year.[10]

## Charity

[edit]

Bloomberg News reported that the founders of TGS have been donating large sums of money away to charity anonymously.[3][5] This was done by making use of many different subsidiaries under TGS to hide the source of funds.[3] Donations include finding a cure for Huntington's disease.[3][5]

## Political activities

[edit]

In the early 2000s, TGS lobbied Congress on tax policy for three consecutive years.[3] In 2001, it submitted a wish list of tax law changes to the United States House Committee on Ways and Means.[3] It also wanted more generous tax treatment for donors who target rare diseases or contribute securities such as bonds to a private foundation.[3]

## References

[edit]

1. ^ "TGS MANAGEMENT CORP". Dun & Bradstreet.
2. ^ "Who we are". TGS Management: Who We Are. TGS Management.
3. ^ a b c d e f g h i j k l m n o "The $13 Billion Mystery Angels". Bloomberg.com. May 14, 2014. Retrieved February 9, 2023.
4. ^ a b c d "The hedge fund job you didn't know you wanted that you probably can't get". eFinancialCareers. May 21, 2014. Retrieved February 9, 2023.
5. ^ a b c d e f "Princeton Newport's Secretive Successor". Community News. June 13, 2017. Retrieved February 9, 2023.
6. ^ a b Paltrow, Scot J.; Schine, Eric (December 9, 1988). "Princeton/Newport, Target of U.S. Probe Linked to Drexel, Will Close". Los Angeles Times. Retrieved February 9, 2023.
7. ^ a b c "New raiders hit Auld Reekie". The Observer. February 18, 2001. ISSN 0029-7712. Retrieved February 9, 2023.
8. ^ "BrokerCheck - Find a broker, investment or financial advisor". brokercheck.finra.org. Retrieved February 9, 2023.
9. ^ a b Rebong, Kevin (February 1, 2023). "TGS Management pays $240M to buy site for Irvine data hub". The Real Deal Los Angeles. Retrieved February 9, 2023.
10. ^ Hope, Gregory Zuckerman and Bradley (May 21, 2017). "The Quants Run Wall Street Now". Wall Street Journal. ISSN 0099-9660. Retrieved February 9, 2023.

## External links

[edit]

* Official website

* v
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Hedge funds

Investment
strategy|

| Arbitrage /
relative value|

* Capital structure arbitrage
* Convertible arbitrage
* Equity market neutral
* Fixed income arbitrage / fixed-income relative-value investing
* Statistical arbitrage
* Volatility arbitrage

|

Event-driven|

* Shareholder activism
* Distressed securities
* Risk arbitrage
* Special situation

Directional|

* Convergence trade
* Commodity trading advisors / managed futures account
* Dedicated short
* Global macro
* Long/short equity
* Trend following

Other|

* Fund of hedge funds / Multi-manager

Trading|

* Algorithmic trading
* Day trading
* High-frequency trading
* Prime brokerage
* Program trading
* Proprietary trading

Related
terms|

| Markets|

* Commodities
* Derivatives
* Equity
* Fixed income
* Foreign exchange
* Money markets
* Structured securities

|

Misc|

* Absolute return
* Arbitrage pricing theory
* Assets under management
* Black–Scholes model (Greeks: delta neutral)
* Capital asset pricing model (alpha / beta / security characteristic line)
* Fundamental analysis
* Hedge
* Securitization
* Short
* Taxation of private equity and hedge funds
* Technical analysis

Investors|

* Vulture funds
* Family offices
* Financial endowments
* Fund of hedge funds
* High-net-worth individual
* Institutional investors
* Insurance companies
* Investment banks
* Merchant banks
* Pension funds
* Sovereign wealth funds

Governance|

* Fund governance
* Standards Board for Alternative Investments
* Managed Funds Association

* Alternative investment management companies
* Hedge funds
* Hedge fund managers
* List of hedge funds

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