The Invisible Hands: Top Hedge Fund Traders on Bubbles, Crashes, and Real Money, Revised and Updated

Chapter 2

The Family Office Manager

Jim Leitner

Falcon Management

“The Family Office Manager” is the most popular chapter in Inside the House of Money. The original interview was assembled from a series of discussions with Jim Leitner, who described his approach as attempting to combine the best of hedge fund investing with the best of real money management. In light of what happened to the real money world in 2008, those conversations provided the inspiration for this book.

Leitner got into the markets as a money broker, scribbling prices on the chalkboard of a New York trading floor while still in school. He moved on to become a proprietary trader in London, focused principally on interest rates and currencies, and later moved out the risk spectrum into equities, then frontier emerging markets. He ran the European trading desk at a major bank and then branched off on his own to run managed accounts for some of the most famous investors in the world. Eventually, having accumulated enough capital, he whittled his investor base down to just himself and set up his own family office behind a gas station in suburban New Jersey. It was there that he developed the unique absolute return strategy for managing his own money, a strategy he has employed to great success for the past decade. He focuses truly on absolute returns, preferring to express trades through option structures wherever possible, limiting downside risk and making it easy to sleep at night. Leitner has also been a member ...