PDT Partners, LLC is an investment management firm with more than $11 billion in assets under management (AUM). It manages a total of eight funds - or pooled investment vehicles - and currently employs 72 advisors. It does not manage any funds other than hedge funds.
It's important to understand that hedge funds are often complex, loosely regulated investments and therefore accessible to accredited investors. If you're looking for trusted and comprehensive support in managing your own finances, consider speaking to a professional financial advisor.
PDT Partners Background
PDT Partners was formed in September 2010 and began investment advisory activities in July 2012. The firm, together with its affiliates, developed from Process Driven Trading, a Morgan Stanley trading division founded in 1993.
The principal owner of PDT Partners, LLC is PDT Capital Group, LP that is ultimately controlled by CEO and quantitative trader Peter Muller. Morgan Stanley had held special non-voting membership interests in PDT Partners, LLC but these interests terminated in 2019.
The firm's only clients are the Funds, or pooled investment vehicles, to which the firm provides investment advice. Some of the firm's Funds are Trading Funds and others are Allocating Funds.
PDT Partners generally requires the accredited investors in its Funds to make a minimum initial investment of $5 million.
PDT Partners Investment Philosophy
According to the firm's website, PDT Partners is at its heart driven by scientific principles and a compassionate culture and does not see itself as a typical finance trading company. The firm uses quantitative investment strategies - involving mathematical models to review data and draw conclusions - in order to provide investment advisory services to its Funds. Many of the firm's researchers hold advanced degrees in mathematics and/or science. Their work consists of developing quantitative models to identify market inefficiencies and predict market movements. After rigorously researching and testing a model, the firm deploy it to run live on its automated trading systems, which can then trade on electronic markets around the globe.
Using these quantitative models, the firm trades a broad range of liquid, publicly traded U.S. and non-U.S. securities and other instruments - including equities, futures contracts, foreign exchange, and derivatives of those. In limited circumstances, the firm will invest in private securities or other instruments.
Each Fund is managed according to the investment objectives and policies that the firm provides in its offering materials and other documents that govern the way the Fund is handled. Investment strategies vary by assets traded, forecasting technique, risk profile and other factors. PDT Partners monitors the strategies for these Funds at regular intervals and intervenes occasionally in order to reduce perceived risks.
Largest Hedge Funds Managed by PDT Partners
PDT Partners Master Fund I, LLC
- AUM: $3,988,887,618
- Minimum: $25 million
- Beneficial Owners: 128
PDT Mosaic Master Offshore Fund, LLC
- AUM: $2,973,754,420
- Minimum: $5 million
- Beneficial Owners: 36
PDT Mosaic Master Onshore Fund, LLC
- AUM: $2,835,074,640
- Minimum: $5 million
- Beneficial Owners: 53
PDT Mosaic One Fund, LP
- AUM: $1,160,354,873
- Minimum: $5 million
- Beneficial Owners: 2
PDT Partners Portfolio IV, LLC
- AUM: $738,275,000
- Minimum: $25 million
- Beneficial Owners: 7
Fees at PDT Partners
PDT Partners does not have a general fee schedule. Fees are charged by the firm to the fund, not to the clients directly. Management fees at the firm are generally based on the assets under management of each Fund - up to 3.5% per year. Additionally, performance-based fees range from 20% to 50% and subject to what's called a high-water mark, or an all-time high.
Information regarding actual fees charged to any specific Fund will be listed in the offering documents for that Fund. Management fees are usually paid monthly in advance and performance-based fees are usually paid or allocated annually or semi-annually. PDT deducts fees directly from the Fund assets.
Additional fees and expenses may apply - including but not limited to document preparation or modification fees, third-party fund administration expenses, certain taxes and regulatory expenses - so it is imperative that potential clients reach out about their particular situation.
What to Watch Out For
Again, it's important to understand that hedge funds are often complex, loosely regulated investments and therefore accessible only to accredited investors, who, along with sophisticated investors, are allowed by the SEC to buy securities like these. These two groups of investors differ from retail investors or individual investors, who might be taking a more DIY approach or enlisting the services of a financial advisor.
Within the past 10 years, PDT Partners has not undergone any disciplinary or legal action deemed material to a client’s evaluation of its business integrity. That said, as an SEC-registered investment manager, the firm is legally obligated to uphold its fiduciary duty and work in clients’ best interests at all times. You can view its latest Form ADV on the official website of the Securities & Exchange Commission (SEC).
Becoming a Client of PDT Partners
If you are an accredited investor and wish to become a client of PDT Partners, you can visit its website or call (212) 621-0400.
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