Former Morgan Stanley CIO launches hedge fund

Date: Friday, March 23, 2007
Author: Heidi Moore, Financial News

Morgan Stanley’s former chief investment officer started a hedge fund with his former colleagues just as pension plans' allocations to the asset class rises to new highs.

Joseph McAlinden, formerly chief investment officer of Morgan Stanley Investment Management, launched hedge fund Catalpa Management. The chief investment strategist of Catalpa is Warren Hatch, who was an executive director at Morgan Stanley.

The team also includes chief financial officer Andrew de Montille, the former co-head of Lehman Brothers Hedge Fund Consulting.

McAlinden, who helped found Dillon Read’s research department, ran Argus Research before joining Morgan Stanley in 1995.

McAlinden was known for his focus on US equities while at the bank. His new firm’s first fund will be an international fund named Global Thematic Opportunities. Rather than investing in individual stocks, the fund will take positions in futures, exchange traded funds and customized baskets of securities.

A recent survey from State Street Global Advisors found the proportion of institutional investors without any hedge fund exposure at all dropped from 16% during 2005 to just 4% last year.