Commodities Corporation

Commodities Corporation

Industry	Investment management
Fate	Acquired by Goldman Sachs
Successor	Goldman Sachs Princeton, Goldman Sachs Hedge Fund Strategies
Founded	1969
Founder(s)	Helmut Weymar, Amos Hostetter Sr.
Defunct	1997
Headquarters	Princeton, New Jersey
Products	Hedge funds

Commodities Corporation (frequently referred to as "CC") was a financial services company, based in Princeton, New Jersey that traded actively across various commodities. The firm was noted as one of the leading commodity and futures trading firms. CC is credited for launching the careers of many notable hedge fund investors and for its influence on global macro investing.

The company was acquired in 1997 and operates as a subsidiary of Goldman Sachs.

History

The company was founded by Helmut Weymar and Amos Hostetter (d. 1977) and with $2.5 million of capital in 1969. Weymar, who was a childhood friend of Hostetter's son Amos Jr., had studied commodities at MIT. As a result of his PhD thesis work on cocoa, Weymar took a job, working for Nabisco in 1965. Hostetter, who had been Weymar's mentor, had begun trading stocks and commodities in the 1930s working for Hayden Stone. Hostetter's, whose simple principles for trading are still widely circulated, joined the firm at the age of 67 trading part time and working to create trading systems to be used by the entire firm.^[1]

Among CC's other co-founders were Nobel laureate economist Paul Samuelson, who was also Weymar's thesis advisor, Paul Cootner, an MIT professor, and Frank Vannerson, a colleague of Weymar's from Nabisco.^[1] CC would bring a large number of PhDs onto its payroll through the 1970s. CC was originally founded to take advantages of trading opportunities in tradable physical commodities but would later branch out into trading other futures such as currency.^[2]

After betting very successfully against the market in 1980, the firm began to receive significant attention. The firm partnered with Paine Webber Jackson & Curtis to launch the Princeton Futures Fund, a $23 million investment fund for US investors in 1981. The company was profiled in Fortune magazine in 1981.^[1] The firm was also later featured prominently in the book, "Market Wizards", a series of interviews with the worlds top traders of the 1980s. The book was written by Jack Schwagger of Commodities Corporation. The firm also completed construction of a new headquarters building in Princeton, NJ in 1980.

In 1989, CC sold a 30% interest in the company to ORIX Corporation for $80 million.^[3] In 1995, CC acquired an 80% interest in a unit of Crédit Commercial de France.^[4]

Commodities Corporation was acquired by Goldman Sachs in 1997 for an undisclosed amount, estimated to be in excess of $100 million. At the time of its acquisition, CC had approximately $2 billion in assets under management.^[5] The firm was subsequently renamed Goldman Sachs Princeton LLC and served primarily as a fund of funds.^[6] Today, the business is known as Goldman Sachs Hedge Fund Strategies and is part of Goldman Sachs Asset Management.^[7]

Former employees

In addition to its founder, the firm's early co-founders included a number of notable individuals, including

• Paul Samuelson, nobel laureate economist
• Paul Cootner, professor of finance at the Massachusetts Institute of Technology, noted for his role in the development of the Random walk hypothesis in his 1964 book The Random Character of Stock Market Prices.^[8]
• Amos Hostetter, notable equity and commodity trader for Hayden Stone

Also, a number of well-known Wall Street traders began their hedge fund careers at Commodities Corporation, including:

• Paul Tudor Jones, founder of Tudor Investment Corporation
• Louis Bacon, founder of Moore Capital Management
• Grenville Craig, founder of Tiverton Trading
• Bruce Kovner, founder of Caxton Associates
• Christian Levett, founder of Clive Capital LLP
• Michael Marcus, a leading commodities and currency trader
• Jack D. Schwager, an author on financial topics and hedge fund manager
• Ed Seykota, a computer scientist, technical trader and pioneer in System Trading
• Willem Kooyker, founder of Blenheim Capital

References

1. ^ ^{a b c} Princeton's Rich Commodity Scholars Fortune, February 9, 1981. Retrieved 4/19/10
2. ^ Steven Drobny and Niall Ferguson. Inside the House of Money. 2008, p. 9-10
3. ^ Commodities-Orix. New York Times, June 15, 1989
4. ^ Commodities Corp. Makes an Acquisition. New York Times, October 5, 1995
5. ^ Goldman Says It Will Buy Asset Adviser. New York Times, May 1, 1997
6. ^ Goldman Sachs Princeton LLC Adds Four Portfolio Managers. Daily News, January 17, 2002
7. ^ Nadja Pinnavai, Head of Hedge Fund Strategies talks to Simon Kerr. The Hedge Fund Journal, September 2006
8. ^ Cootner, Paul H. (1964). The random character of stock market prices. MIT Press. ISBN 9780262030090. http://books.google.com.sg/books?id=7XGvQgAACAAJ. 

• Covel, Michael W. (2009). Trend Following (Updated Edition): Learn to Make Millions in Up or Down Markets. FT Press. ISBN 0-13-702018-X. 
• Gallo, Peter (2002). "Goldman Sachs Princeton LLC Adds Four Portfolio Managers". Daily News. http://www.highbeam.com/doc/1P2-10021191.html. 
• Behind the mystique of Commodities Corp.. Futures, May 1, 1990
• Surprising Profits Of Futures Funds. New York Times, February 6, 1991

External links

• Paul Samuelson’s Secret.