Former executives of Stan Druckenmiller's Duquesne Capital Management are opening a new firm with $5 billion, said four people briefed on the plans.
Mr. Druckenmiller said in August that he was closing his 30-year-old hedge fund firm and returning client capital. He will invest about $1 billion in the new fund, Point State Capital, according to the people. He will have no ownership stake in the firm, they said.
The remaining $4 billion will come entirely from former Duquesne investors, said the people, who asked not to be named because the fund is private.
The hedge fund startup would be the second largest ever. Jack Meyer, the former head of Harvard University's endowment, holds the record for the largest hedge fund startup, when he opened Convexity Capital Management with $6 billion in 2006. This year, the biggest new funds have opened with less than $1 billion.
Point State, which is closed to new clients, will begin trading next year and be based in New York, the people said. Sean Cullinan, who was vice chairman of Duquesne, will serve as CEO of Point State. Six former Duquesne portfolio managers will be joining the firm, which is named for a park in Pittsburgh where Fort Duquesne once stood.
Shawn Pattison, a spokesman for Point State, declined to comment, citing securities law.
As of Nov. 1, Mr. Druckenmiller had returned about 98% of the $12 billion in investor capital he managed. He will open a family office in which he'll manage about $3 billion, said two people familiar with his plans.
Duquesne, which has never had a money-losing year, posted an average annual return of 30% since 1986.
