Roy Gary Niederhoffer (b. in 1966) is an American hedge fund manager and philanthropist. Since Niederhoffer founded R. G. Niederhoffer Capital Management, Inc. in 1993, his funds have been noted for their strong performance in difficult periods.[1] The R. G. Niederhoffer Diversified Program, is reported to have returned +60% in 2000,[2] +51% in 2008, and overall, have had strong long-term returns over +17% annualized return from 1999 through March 2009).[3] His firm’s assets under management were reported to be $943 million as of August 2010.[4]
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Niederhoffer was raised in Great Neck, New York. His father, Arthur Niederhoffer[5] (1917–1981) was a professor of Sociology at John Jay College of Criminal Justice, the influential author of several books[6] on the police and criminology such as “Behind the Shield,” “The Ambivalent Force,” and “The Police Family” as well as a 20 year veteran[7] of the New York City Police Department. His mother, Elaine Niederhoffer[8] (1925–2006) was an English teacher, author,[9] and editor.
At age 13, he and a classmate founded a company called Software Innovations, which sold computer games such as Alien Invasion[10] for the TRS-80 microcomputer.
In 1982, when Niederhoffer was 16, the firm changed its name to Microvations, Inc., soon thereafter employed over 30 people, mostly his classmates, and produced over 450 individual titles by 1983. Though the company closed when Niederhoffer left for college at Harvard, his interest in computers continued.
Niederhoffer attended Great Neck South High School and Harvard College, from which he graduated magna cum laude in 1987 with a BA in Computational Neuroscience.
Following university, Niederhoffer worked for his brother, hedge fund manager Victor Niederhoffer, from 1987 to 1992. Victor Niederhoffer is known for training other successful hedge fund manager such as Monroe Trout, Paul Buethe,[11] and Toby Crabel. Roy Niederhoffer left his brother’s firm in 1992, opening R. G. Niederhoffer Capital Management, Inc. in 1993.[12]
Niederhoffer has been attributed to employ an investment strategy known as short-term trading. According to reports, Niederhoffer’s computerized trading models are able to profit from the presence of cognitive biases in the human brain, which cause investors and also the models they create to behave predictably. Articles state that his computer models make thousands of individual trades[2] per year that last between several hours to a week, occasionally longer, and are active in many individual stocks, equity index futures, fixed income, commodities, and foreign exchange.[2] His firm was noted for strong performance during the financial crisis of 2007-2010.[13]
Niederhoffer is a violinist with the Park Avenue Chamber Symphony, and with them has performed in venues such as Carnegie Hall, Avery Fisher Hall and Alice Tully Hall. He is also an avid classical and jazz pianist, and is reportedly able to play almost any song by ear on piano. He also plays several other instruments.
Niederhoffer is the Executive Producer of the Flying Karamazov Brothers[19] currently playing Off-Broadway.[20]
Niederhoffer currently serves on the boards of trustees of several cultural institutions, such as the New York City Opera,[21] The Harmony Program,[22] and Concert Artists Guild,[23] and has been on the board of the Kaufman Center[24] (consisting of the Special Music School, Lucy Moses School and Merkin Concert Hall).
He also has created the Niederhoffer Foundation, which is active in music education, Jewish causes, and aid to the needy.
Niederhoffer is the brother of hedge fund manager Victor Niederhoffer and clinical psychologist Diane Klein,[25] the son of sociology professor and author Arthur Niederhoffer[26] and author Elaine Niederhoffer and the uncle of director and author Galt Niederhoffer and musician Amy Klein.[27]