Victor Niederhoffer

Victor Niederhoffer was born on December 10, 1943, in Brooklyn, New York, and grew up in the Brighton Beach neighborhood in a small, roughly 750-square-foot apartment. His family was Jewish and lower middle class. His paternal great-grandparents had come from Austria to Manhattan's Lower East Side in the late 1800s. His father, Arthur "Artie" Niederhoffer (1917 to 1981), worked his way through Brooklyn College and Brooklyn Law School, served 21 years in the New York City Police Department, retiring as a lieutenant, earned a Ph.D. in sociology from New York University and taught criminology at John Jay College of Criminal Justice. His mother, Elaine (née Eisenberg) Niederhoffer (1925 to 2006), held a master's degree in sociology and worked as an English teacher, author and editor. His siblings are Roy Niederhoffer, who also became a hedge fund manager, and Diane Niederhoffer Klein. The Brighton Beach Baths, three blocks from home, were where he learned handball, paddleball, paddle tennis and tennis, sports that shaped his fast hands and aggressive reflexes.

Niederhoffer attended P.S. 225 and 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 paper and class president. He went to Harvard University on scholarship and earned a B.A. magna cum laude in statistics and economics in 1964. His senior thesis, "Non-Randomness in Stock Prices: A New Model of Price Movements," written under Robert Dorfman, challenged the random walk view of markets. He then completed a Ph.D. in finance at the University of Chicago in 1969 with a dissertation titled "World Events and Stock Prices," which found that the market tended to fall the day after bad news and recover over the following days.

Niederhoffer taught finance at the University of California, Berkeley, from 1967 to 1972 and published papers on market anomalies, including "Market Making and Reversal on the Stock Exchange" (1966, with M.F.M. Osborne), often cited as a founding work of statistical arbitrage and market microstructure, and a 1971 study that measured the importance of news by headline font size. In 1965 he co-founded the investment bank Niederhoffer, Cross and Zeckhauser, which specialised in selling small family-owned companies to public companies. In 1980 he founded NCZ Commodities, later Niederhoffer Investments, trading commodities, fixed income and currencies. Traders including Monroe Trout, Toby Crabel and his brother Roy worked at the firm. He became a partner of George Soros and managed Soros's fixed income and foreign exchange trading for roughly a decade. Niederhoffer Investments returned about 35 percent a year from inception through 1996. Business Week named him the top U.S. commodities and futures manager in 1994, and MAR ranked him the world's number one hedge fund manager for 1996. In October 1997 losses on Thai bank stock options during the Asian financial crisis, combined with the market drop of October 27, closed the firm. He restarted with the Wimbledon Fund in 1998 and opened the offshore Matador Fund in 2002 and the U.S. fund Manchester Partners. His funds compounded at about 50 percent a year over five years and in 2006 MarHedge gave Matador Fund and Manchester Trading its award for best CTA performance for 2004 and 2005. The subprime crisis led Matador to close in September 2007 after losing more than three quarters of its value.

As a teenager Niederhoffer won a string of New York area tennis championships. He took up squash at Harvard in 1960 and, coached by Jack Barnaby, won the U.S. National Junior title a year later while unseeded. He played number one for Harvard, was a First Team All-American each year, and won the 1964 National Intercollegiate Individual championship. He won the U.S. National Singles in 1966, 1972, 1973, 1974 and 1975, becoming the first player to win it four years in a row, and the national doubles in 1968 (with Victor Elmaleh), 1973 (with Jim Zug) and 1974 (with Colin Adair). In 1975 he beat Sharif Khan in Mexico City to win the North American Open, the last amateur to do so, and went through the 1974 to 1975 season unbeaten in major singles events. He later turned professional and led the men's pro hardball tour. He won U.S. paddleball singles titles in 1965 and 1966 and doubles titles in 1964 and 1965, and reached the quarterfinals of the 1975 U.S. racquetball nationals only months after first playing the game, holding a winning career record against Marty Hogan. He once practiced or competed on 3,500 consecutive days.

Niederhoffer married Gail Herman in 1965; they had two daughters and separated in 1981. He married Susan Cole in 1991; they had four daughters and separated in 2003, and she survived him as his wife. His children are Galt (a filmmaker who also played squash at Harvard), Katie, Rand, Victoria, Artemis, Kira and Aubrey, and he had 15 grandchildren. He built a large neo-Tudor home in Weston, Connecticut, in 1982 and lived there for the rest of his life. He collected about 15,000 books, letters and some 2,500 paintings, and once owned one of the finest private collections of antique American silver. He did not own a television, said he preferred books more than 100 years old, wore bright pastel clothes and mismatched sneakers, and kept a socks-no-shoes rule in his office.

Niederhoffer was an economic libertarian and an admirer of Ayn Rand, naming two of his daughters Galt and Rand. From 1985 to 2017 he hosted the NYC Junto on the first Thursday of every month, a discussion group on libertarianism, Objectivism and investing inspired by Benjamin Franklin's Junto. In markets he insisted on counting and testing rather than accepting received wisdom, a stance summed up by friends as "if you cannot count it, you do not know it." He also spoke out against the closed, exclusive culture of the squash establishment, saying the game should be opened up to women, children, Jews and players of modest means.

Niederhoffer is remembered both as one of the great American squash champions and as an early quantitative trader. His 1960s research on short-term price patterns is credited with helping to found statistical arbitrage and market microstructure studies. His dramatic losses in 1997 and 2007 became case studies in risk: Nassim Nicholas Taleb drew on his story in Fooled by Randomness, Malcolm Gladwell wrote about him in the 2002 essay "Blowing Up," and John Cassidy profiled him in The New Yorker in 2007. Through the NYC Junto, Daily Speculations and personal mentoring he influenced many traders and writers. After his death MIT finance professor Andrew Lo called him "a giant of modern finance," and US Squash described him as one of the most successful and controversial champions in American squash history.

Eight U.S. national squash titles (five singles, three doubles); 1964 National Intercollegiate Individual squash champion; 1975 North American Open champion; U.S. paddleball champion (two singles and two doubles titles); Pierre de Coubertin Fair Play Trophy, presented at UNESCO headquarters in Paris in 1976; Harvard Varsity Club Hall of Fame (1988); College Squash Association Hall of Fame (1992); inaugural class of the U.S. Squash Hall of Fame (2000); Jewish Sports Heritage Hall of Fame (2018); Business Week top U.S. commodities and futures manager (1994); MAR number one hedge fund manager in the world (1996); MarHedge best CTA performance award for 2004 and 2005 (presented 2006).

Niederhoffer wrote The Education of a Speculator (John Wiley and Sons, 1997), a New York Times bestseller, and co-wrote Practical Speculation (2003) with Laurel Kenner, with whom he also wrote a weekly markets column for CNBC MoneyCentral from 2000 to 2003. He contributed a foreword to a 2006 edition of Henry Clews's Fifty Years in Wall Street. He was the subject of a 1997 Japanese television documentary and of the 1998 comic strip "Titans of Finance: Hoodoo" by Rob Walker and Josh Neufeld. In later years he posted market videos and interviews on his own YouTube channel.

Niederhoffer's career drew controversy on and off the court. His five-year boycott of the national squash singles, in protest at what he saw as antisemitism in private clubs, divided the sport's establishment. In finance, the collapse of his fund in October 1997 and of the Matador Fund in 2007 cost investors heavily and made him a symbol of tail risk for critics such as Nassim Nicholas Taleb. After 1997 he sued the Chicago Mercantile Exchange on behalf of his clients, alleging floor traders had marked options against him; the exchange settled, and he passed the full settlement to his clients without deducting his legal fees.

Victor Niederhoffer died of natural causes on August 4, 2026, at his home in Weston, Connecticut, aged 82. His death was announced by his brother Roy. A celebration of life was held at Riverside Memorial Chapel on West 76th Street in New York on August 9, 2026. Tributes came from the squash world, including US Squash, and from finance, including Andrew Lo and the hedge fund community, with The New York Times, Bloomberg and Opalesque publishing obituaries.