Former Galleon Manager Swartz to Start Technology Hedge Fund for Fortress

By Sabrina Willmer - Dec 24, 2011 12:54 AM GMT+0700

Peter Swartz, a former Galleon Group LLC portfolio manager, is starting a new technology hedge fund for Fortress Investment Group LLC.

Swartz will be chief investment officer of the Fortress TMT Fund, which will make bets on technology, media and telecommunications stocks, according to a December investor presentation, a copy of which was obtained by Bloomberg News. Former Galleon colleagues Michael Levine and Murali Abburi will join him on the fund as equity analysts.

The new fund will invest as much as 50 percent of its assets in U.S. companies, with the rest allocated to Europe, China, Taiwan, Korea and Japan, according to the presentation, which didn’t include a fundraising target. The fund expects to take about 25 long and short positions, wagering on both rising and falling prices.

Gordon Runte, a spokesman for New York-based Fortress, declined to comment. The publicly traded firm has $43.6 billion in assets under management, including hedge funds, private equity and other investments.

Swartz has been a senior portfolio manager for the Fortress Asia Macro Fund since March. He was hired in 2010 as a managing director and equity analyst covering technology, media and telecom for the Fortress Macro Fund. The Fortress Asia Macro lost a net 1.2 percent since March, according to the presentation.

Levine and Abburi, who will be managing directors of the fund, were hired by Fortress in March 2010, according to the presentation.

CEO Takes Leave

Fortress Chief Executive Officer Daniel Mudd this week took a leave of absence following a lawsuit by the U.S. Securities and Exchange Commission over his role as the former head of Fannie Mae. He was replaced on an interim basis by Randal A. Nardone, the company’s co-founder.

Galleon was the target of a nine-year investigation by U.S. officials, culminating in the May conviction of co-founder Raj Rajaratnam on insider-trading charges. Rajaratnam, 54, this month began serving an 11-year sentence at a federal prison in Massachusetts.

To contact the reporter on this story: Sabrina Willmer in New York at swillmer2@bloomberg.net

To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net