Victor B. Niederhoffer (December 10, 1943 – August 4, 2026) was an American hedge fund manager, eight-time U.S. National Squash Champion (five times in singles) and four-time national paddleball champion (twice in singles), bestselling author, and statistician. Born and raised in Brooklyn, New York, after attending public schools there he graduated with a B.A. in Statistics and Economics from Harvard University, and a Ph.D. in Finance from the University of Chicago Booth School of Business.
His company Niederhoffer Investments returned 35% a year from inception in 1980 through 1996, as he made hundreds of millions of dollars for his clients. Business Week named him the No. 1 commodities and futures manager in the United States, and MAR ranked him the No. 1 hedge fund manager in the world. However, losses during the October 27, 1997, mini-crash forced the company to close its doors.
Niederhoffer came back with two new funds, and in a five-year period beginning in 2001, Niederhoffer's funds returned 50% a year compounded. MarHedge awarded the funds the prize for best performance by a commodity trading advisor (CTA) in the two years 2004 and 2005. However, the funds were caught up in the 2007 subprime mortgage financial crisis, and closed in September 2007.
He won the U.S. National Squash Championship eight times, despite taking a five-year hiatus mid-career to protest anti-semitism in the sport. He also won the U.S. Paddleball Championship four times. Niederhoffer was inducted into the U.S. Squash Hall of Fame, the College Squash Hall of Fame, the Jewish Sports Heritage Hall of Fame, and the Harvard Varsity Club Hall of Fame, and received the Pierre de Coubertin Fair Play Trophy.
Early life Victor Niederhoffer was born in the Brighton Beach neighborhood, in Brooklyn, New York on December 10, 1943. He grew up there in a lower-middle-class family in a small 750-square-foot apartment, and was Jewish."Capitalist squash", The New York Times, April 13, 1975.
At the end of the 1800s, his paternal great-grandparents had moved from Austria to the Lower East Side in Manhattan in New York City. His paternal grandfather Martin (Martie), an accountant and a court interpreter in Yiddish and Spanish, married Birdie (née Kuminsky) in 1916.Jack Raymond Greene (2006), Encyclopedia of Police Science, Routledge, pp. 846–852. His maternal grandparents were Sam and Gertrude Eisenberg.
His father, Arthur "Artie" Niederhoffer (1917–1981), attended Brooklyn College from age 16 by playing football to put himself through college and graduated in 1937. He then worked his way through Brooklyn Law School ('39), and finally graduated with a Ph.D. in sociology from New York University in 1963. Not able to find a job as a lawyer when he graduated law school, he served in the New York City Police Department for 21 years, retiring as a lieutenant. He then taught as a professor of sociology at John Jay College of Criminal Justice for 14 years.Roy Niederhoffer, "In Memory of Elaine Niederhoffer; Eulogy for My Mom", Daily Speculations, April 2006. Retrieved November 8, 2010. He also taught at Brooklyn College, New York University, Hofstra University, Queens College, and the New York City Police Academy. He authored several books, primarily on the police and criminology, including Behind the Shield, The Ambivalent Force, The Gang, and The Police Family: From Station House to Ranch House (co-authored with his wife). He was awarded the President's Medal of John Jay College for his achievements."Dr. Arthur Niederhoffer, A Professor at John Jay", The New York Times, January 16, 1981William G. Bailey (1995). The Encyclopedia of Police Science, Taylor & Francis. Victor's mother, Elaine (née Eisenberg) Niederhoffer (1925–2006), descended from a long line of rabbis. She graduated with a master's in sociology from Brooklyn College, and was an English teacher, author, and editor."Elaine Eisenberg Niederhoffer Obituary", The New York Times, April 25, 2006
His brother Roy Niederhoffer is himself a hedge fund manager. He worked for Victor and his hedge fund from 1987 to 1992, trading fixed-income securities, before launching his own hedge fund, R. G. Niederhoffer Capital Management in 1993."R. G. Niederhoffer Capital Management." niederhoffer.com."RG Niederhoffer Capital Management posts 27.4% Q1 gain even as volatility rises", Hedge Week, April 7, 2026. Their sister is Diane Niederhoffer Klein.
Education Niederhoffer attended P.S. 225 in Brooklyn. His sixth-grade teacher wrote to him: "Although a little trying at times, you were the spark the class needed this year. You have a keen mind; learn to curb your inclinations to demonstrate superiority." He subsequently went to Abraham Lincoln High School in Brooklyn, where he was an A student, a math prodigy, captain of the tennis team, a pianist in the orchestra, a clarinetist in the band, sports editor of the school newspaper, and class president.
He then studied Statistics and Economics at Harvard University, which he attended on scholarship, earning a B.A., magna cum laude, in 1964. Niederhoffer's senior thesis, "Non-Randomness in Stock Prices: A New Model of Price Movements", disagreed with the "random walk hypothesis" in finance, which maintained that the stock market followed a random, haphazard path; he argued that it followed patterns that could be predicted. His thesis advisor was Robert Dorfman.
Niederhoffer followed that by studying in a doctoral program at the University of Chicago Booth School of Business on scholarship, graduating with a Ph.D. in Finance in 1969."Niederhoffer, Victor" , The University of Chicago."The Re-education of Victor Niederhoffer", Bloomberg Markets, July 2006. His Ph.D. dissertation in December 1969 was entitled "World Events and Stock Prices: A Study of New York Times Headlines and Subsequent Movements in the Standard and Poor's Composite Index." In it, he concluded that during the 1960–68 study period, there was a consistent pattern of stock price movement on the Standard & Poor's Composite Index subsequent to "bad" world events: the day after such an event, the index fell, but on days two through five, the market rose, suggesting a tendency for investors to initially overreact to bad news and then recover.
Academia Niederhoffer was a finance professor at the University of California, Berkeley from 1967 to 1972."Niederhoffer Wins in Squash Racquets," The New York Times, February 22, 1972. As a college professor, he wrote academic articles about market inefficiencies, and a number of papers on anomalies in stock market behavior. His paper Market Making and Reversal on the Stock Exchange (1966) made Niederhoffer the father of statistical arbitrage and of market microstructure studies. He used innovative methods to search for opportunities in stock markets, such as the one reflected in his paper "The Analysis of World Events and Stock Prices" (1971), which used the font size of newsprint headlines to determine the relative importance of news events and measure how they affected the stock market.
His self-assessment of his performance in the classroom, however, was that he was not a very good teacher. Niederhoffer left academia in 1972 to concentrate fully on his business activities.
Early career In 1965, while still at college, he co-founded Niederhoffer, Cross and Zeckhauser, Inc., with Frank Cross. It was a boutique investment bank which sold small, privately held family-owned companies to public companies, and it became one of the leading specialists in the U.S. in mergers and acquisitions, representing sellers. Niederhoffer, as CEO and chairman, pioneered a mass marketing approach in investment banking, contacted 200,000 independent companies, and did a large volume of small deals at the firm."Niederhoffer", The Daily Reflector, January 17, 1979."Victor Niederhoffer to Marry Gail Herman, Bryn Mawr '64", The New York Times, November 7, 1968. He also bought many privately held firms with Dan Grossman, his partner during this period. The firm was later called Niederhoffer Henkel, and was still later merged into CBIZ."Form S-4; Century Business Services, Inc.", CBIZ. June 18, 1999.
In 1980, influenced by his academic studies on market inefficiencies, he founded a trading firm, NCZ Commodities, Inc. (later known as Niederhoffer Investments, Inc.), and began to trade in commodities, including gold, silver, fixed income, and foreign exchange. He opened an office at East 48th Street and Third Avenue in Midtown Manhattan, while he lived at East 83rd Street and Madison Avenue on the Upper East Side. After he finished work at his office very late at night, he would run the two miles to his home, to keep in shape for squash."Best Squash Elbow Bends the Least", The New York Times, February 18, 1973. He explained the need for elite conditioning, saying: "In squash, you're constantly springing back and forth. Each point is like rushing the net in tennis for a drop shot and racing back to the baseline—10 times for one point."
Niederhoffer predicted daily stock market price changes, based on an analysis of 18 years of stock market statistics."Market Place; Theirs Often Is A Risky Trade", The New York Times, December 19, 1981. Among others, Monroe Trout, Toby Crabel, and Victor's brother Roy Niederhoffer all traded at the firm.
Niederhoffer's success attracted the attention of investor George Soros. Niederhoffer became a partner of Soros, and managed all of his fixed income and foreign exchange from 1981 to 1993. For a decade, the two of them spoke 50 times a day."Victor Niederhoffer: Lessons of Making and Losing a Fortune", omny.fm, September 15, 2017. Soros wrote in The Alchemy of Finance that Niederhoffer was the only one of his managers who had retired voluntarily from trading for him while still ahead."If You Haven't Already, Meet Victor Niederhoffer", CNBC, March 10, 2011. Soros held Niederhoffer in such high esteem that he sent his son to work for him, to learn how to trade.
Niederhoffer Investments hedge fund; high returns Niederhoffer Investments returned 35% a year from inception in 1980 through 1996. Finance author Barry Ritholtz wrote that "This has been regarded as one of the best trading records of all time.""MIB: Victor Niederhoffer on Making and Losing Fortunes", The Big Picture, September 19, 2017. From the early 1960s through the mid–1990s he made hundreds of millions of dollars for his clients."Take Two", Spear's, September 1, 2007. In 1994, Business Week named him the No. 1 commodities and futures manager in the United States. In 1996, MAR ranked him the No. 1 hedge fund manager in the world. Barron's called him one of the most prominent hedge fund managers in the U.S.
1997 losses In the spring of 1997, Niederhoffer Investments was not finding many opportunities for investments and, having returned much of its funds to customers such as George Soros, began investing several hundred million dollars in areas in which Niederhoffer later admitted that he did not have much expertise, borrowing on margin against his assets to fund his purchases. Niederhoffer decided to sell put options on Thai bank stocks to collect premium – the price of the option – (being effectively long these stocks), which had fallen heavily in the 1997 Asian financial crisis, his bet being that the Thai government would not allow these companies to go out of business. However, as the Thai currency crashed, and on October 27, 1997, losses resulting from this investment, combined with a 554-point (7.2%) single-day decline in the Dow Jones Industrial Average (the eighth-largest point decline to date in index history), forced Niederhoffer Investments to close its doors.