An Old-School Hedge Fund Strategy Reboots Outside Big Pod Shops

Five years ago, veteran hedge fund trader Ed Cooper gave up his independence to join a group of peers betting on corporate deals at industry titan Millennium Management. Now he’s back on his own again.

Cooper is among a slew of portfolio managers opting to run their event-driven strategies outside of the giant firms, as some of the pod shops balk at the inherent volatility of the long-time industry staple that wagers on corporate events, including success and failure of deals.

An improving environment for mergers and acquisitions is also acting as tailwind for the departing traders as they ...