CTA pioneer Eckhardt acquires rival trend-follower Rotella Capital

^{By Hugh Leask}

Eckhardt Trading Company (ETC), the long-running Chicago-headquartered managed futures and quantitative investing pioneer, has acquired systematic fund manager Rotella Capital Management.

ETC described the acquisition as a “natural fit” which combines “the strengths and legacies” of two “venerable institutions.” The deal, which was inked earlier in January, will see Eckhardt take control of Bellevue, Wash.-based Rotella’s asset management business, research capabilities and technology functions.

“By integrating the robust assets and intellectual capital of both firms, we are not just expanding our market presence but also enriching our collective expertise,” said Rob Sorrentino, president and chief operating officer of ETC. “This acquisition will broaden our products and investor base.”

A new fund launch on the horizon

The deal adds significant assets in foreign exchange separate accounts that Rotella managed for institutional clients. As a result of the merger, ETC is set to launch an FX-focused hedge fund later in the second quarter, which will invest in both futures and direct FX trades.

Rotella Capital specializes in quantitative research and advanced trading strategies. Since it was founded by Robert Rotella in 1995, the firm has run a number of managed futures strategies for asset managers, fund of funds, pensions, and endowments.

Launched in 1991 by veteran fund manager William Eckhardt, ETC is a research-driven, risk-focused quant investment firm that uses a short-term trading approach built around a series of highly adaptive, highly liquid evolutionary computer models and functionary algorithms.

The firm looks to generate uncorrelated returns for a broad investor base that spans institutions, pension funds, funds of funds, family offices and high-net-worth individuals.

In a deep-dive interview last May, William Eckhardt – whose expertise stretches back to the 1970s – told Alternatives Watch that events of recent years have dramatically altered the structure of a traditional 60/40 allocation mix, adding that the firm’s methods of exploiting market volatility have proved “very additive” to investors’ portfolios.

“Volatility is absolutely essential to understanding risk,” Eckhardt said. “Over the last three-to-five years there have been a lot of firms that have been successful at various points, but they’ve fallen apart at different times during different volatility regimes.

“On the one hand, volatility can be a real hindrance — it can make it hard to execute a strategy. But it can also be something that helps you.”

_{This article, “CTA pioneer Eckhardt acquires rival trend-follower Rotella Capital” was originally published on April 30, 2024 on Alternatives Watch and is republished here with permission from BMV Digital, Inc.}

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