Inside the House of Money: Top Hedge Fund Traders on Profiting in the Global Markets, Revised and Updated

Chapter 4

The Family Office Manager

Jim Leitner

Falcon Management Wyckoff, New Jersey

The sign reads both “Falcon Management” and “Aikido Spirit” outside the sprawling suburban New Jersey house that Jim Leitner calls base for his family office when he is not on the ground scouring for investments in India, the Ivory Coast, or some other far-flung location. Leitner manages mostly his own money and has been doing so for years. As a result, his approach to global macro markets is different from most other fund managers in that he is not long an implicit put option. In other words, if his portfolio blows up, instead of losing his job or his investors, he goes on welfare. But his office environment would imply that he is far from the welfare scenario.

His new office is a noticeable step up from his old locale, one stark room in a strip mall behind a dirty, run-down gas station, where I first met him during the summer of 1999. I was in the Hedge Fund Group at Deutsche Bank in London and eagerly trying to pitch trade ideas to fund managers. Leitner had been doing quite a bit of business in Turkey and had been planning a trip there with Merrill Lynch to kick the tires. He loves doing research on the ground, and Turkey, with one-year interest rates greater than 100 percent and inflation around 60 percent, screamed of opportunity for macro managers with a strong enough stomach to weather the potential volatility and risk.

The central bank governor of Turkey had been embarking on a plan to ...