Roy Niederhoffer

Bio In 1993 he founded R. G. Niederhoffer Capital Management, Inc., (RGNCM), a hedge fund known as a managed futures fund or commodity futures trading company, and he serves as its president. The hedge fund invests in public equity, fixed income, currency, and commodity markets across the globe, as well as in derivatives including spot currencies, futures contracts, forward contracts, swaps, and options. From its inception in 1993 through May 2009, it had annualized returns of approximately 12%, over twice the average of the market (+60% in 2000, and +51% in 2008—when the S&P 500 was down 37%). From 1999 through March 2009, the firm's annualized gain exceeded 17%. His firm was noted for strong performance during the 2008 financial crisis. As of April 2016, the fund had earned an annualized 18.73% since it was started. As of June 2016, the firm's assets under management were $900 million. As of June 2017, the annualized fund returns dropped to 3.58%.

Niederhoffer uses an investment strategy known as short-term trading. He developed his strategy after tracking and analyzing short-term trading patterns. His company uses quantitative analysis to decide upon its investments, obtaining external research to complement its own in-house research. He created the Niederhoffer Foundation, which is active in music education, Jewish causes, and delivering aid to the needy. Niederhoffer serves as chairman of the board of directors of The Harmony Program, which provides daily music lessons and free musical instruments to over 200 New York City Public School and Long Island students in under-served areas, and the Concert Artists Guild. He has also served on the board of the Kaufman Center (consisting of the Special Music School, Lucy Moses School, and Merkin Concert Hall). He delivered relief to victims of Hurricane Sandy in 2012, saying "We can't rely on the government for all of this." In October 2015, Niederhoffer was presented with the Johanna and Leslie Garfield Award for Arts Philanthropy at the New York Youth Symphony's 53rd Annual Benefit Gala. He was also the Executive Producer of The Flying Karamazov Brothers, which played Off-Broadway in 2010 and in London's West End in 2011.

Early life and family Niederhoffer was born and raised in Great Neck, New York. His paternal great-grandparents had moved from Austria to the Lower East Side of Manhattan in the late 1800s. His maternal grandparents were Sam and Gertrude Eisenberg.

His father, Dr. Arthur "Artie" Niederhoffer (1917–1981), graduated from Brooklyn College in 1937, and then from Brooklyn Law School, and finally with a Ph.D. from New York University (1963). His father served in the New York City Police Department for 21 years (retiring as a lieutenant), and then taught as a professor of sociology at John Jay College of Criminal Justice for 14 years. His mother, Elaine (née Eisenberg) Niederhoffer (1925–2006), was an English teacher, author, and editor who had descended from a long line of rabbis.

He had a brother, Victor Niederhoffer (1943–2026), a hedge fund manager and former five-time United States squash singles champion. Niederhoffer grew up without a television in his home. He is the uncle of director and author Galt Niederhoffer.

Education and early entrepreneurship Niederhoffer attended Great Neck South High School, where he was co-editor of the school paper, The Southerner. He graduated in 1983.

Microvations

At age 13, when he was a high school sophomore, Niederhoffer (as president) and classmate Evan Grossman founded a company called Software Innovations, which sold computer games such as Alien Invasion that operated on the Radio Shack TRS-80 microcomputer. They created a mailing list of over 3,000 computer owners, sold shares in the company to their teachers and friends, borrowed money from their families, and printed a six-page mail order catalog listing their programs for sale, along with programs created by friends and other companies.

In March 1982, Money Magazine wrote about them. The fund is a registered Commodity Trading Advisor, Commodity Pool Operator, and a member of the National Futures Association. It is based in New York City, and he serves as its president. That fund accounted for about 40% of its $1 billion in assets. He believes that other short-term investors generally engage in certain predictable behavior: they overemphasize recent experience when they make decisions, they hate to lose even more than they love to win, their behavior becomes increasingly predictable as markets become more volatile, and when the investors are emotional they engage in herd-like behavior and sell stocks when they are at their lowest level and buy stocks when they are at their highest level.

Niederhoffer's computer models analyze the real-time data as it comes in, such as volume and price of every major market and most of the largest stocks. Niederhoffer's strategy thrives on volatility, because it brings out emotional, predictable herd behavior in investors.

His firm's trades generally range in duration from less than an hour to five to ten days, averaging a day and a half. Roy G. Niederhoffer Negative Correlation Fund was the Absolute Return Managed Futures Fund of the Year in 2008, when it returned 55%, and the Diversified Fund Offshore was also nominated for its 2008 performance of 51%. R. G. Niederhoffer Diversified Fund Offshore was the HFM Week Magazine Managed Futures Fund of the Year in 2008. R. G. Niederhoffer Diversified Fund Offshore was ranked #9 of the Top 100 Hedge Funds by Barrons in 2009, and #42 in 2010. Roy G. Niederhoffer Optimal Alpha Fund, Ltd., RGNCM, won the 2016 Investors Choice CTA Fund Long-Term Performance Award. Roy G. Niederhoffer Diversified Offshore Fund, RGNCM, was a nominee for the 2016 Investors Choice CTA Fund of 2015 Award. In addition, Niederhoffer was the Executive Producer of The Flying Karamazov Brothers, which played Off-Broadway in 2010 and in London's West End in 2011. He was a board member of the NYCO when the company filed for bankruptcy in October 2013. For the next two years, he (as chairman) and Michael Capasso (now general director of NYCO) led an effort, called NYCO Renaissance, Ltd., to revive the company. After a protracted legal battle, in January 2016 Niederhoffer and Capasso's effort was approved by the creditors of NYCO as well as the NY State Attorney General to reorganize and revive the company.

Niederhoffer serves as chairman of the board of directors of The Harmony Program, which provides daily music lessons and free musical instruments to over 200 New York City Public School and Long Island students in under-served areas, and the Concert Artists Guild. For his efforts, in 2013 Niederhoffer received the Lehman-LaGuardia Award from the NY Grand Lodge Order of the Sons of Italy in America and the Metro North region of B'nai B'rith.

In October 2015, Niederhoffer was presented with the Johanna and Leslie Garfield Award for Arts Philanthropy at the New York Youth Symphony's 53rd Annual Benefit Gala.