Canada Pension Plan Investment Board (CPPIB) has committed $250m to New York-based hedge fund Taproot Management, backing a novel model that replaces traditional portfolio managers with teams of senior analysts, according to a report by Bloomberg.
The investment lifts Taproot’s assets under management to $300m.
Founded last year by David Lin, formerly of Tamridge Capital and Glenview Capital, Taproot has attracted attention for its cost-efficient structure. Instead of hiring high-priced portfolio managers, the firm recruits experienced analysts – typically with 8–12 years’ experience – who receive single-digit percentage profit shares, less than half the payouts common at larger multi-strats. Their ideas are fed into a proprietary tech platform to drive investment decisions.
The strategy has already delivered early gains, returning 1.6% in July, its first full month of trading, outperforming many quant and multi-strategy peers.
The firm has also secured industry talent: Jason Beverage, former CIO of Two Sigma Advisers and an early backer, has joined Taproot in the same role. The 18-person team also includes ex-Two Sigma executive Kevin Hu and analyst Scott Dragoo.
