TGS Management LLC, an under-the-radar quantitative finance hedge fund with headquarters in Irvine, appears to be making moves for a major boost to its local real estate presence, financial data processing capabilities and its area operations.
The firm and its owners are involved in nearly 163,000 square feet of office space under development in the Irvine Spectrum, on a pair of freeway-fronting siteÂÂs on opposite sides of the San Diego (405) Freeway, next to Laguna Canyon Road.
The sites—expected to hold a data processing center in addition to high-end office space—appear poised to provide a massive boost in space for the secretive firm, whose founding team includes C. Frederick Taylor, one of Orange County’s wealthiest businesspeople.
TGS’ existing headquarters in the Woodbridge area of the city run only about 14,000 square feet, and city filings indicate it is also looking to expand there—but just by 5,000 square feet.
It owns that building, which the company touts on its website as a worker-friendly, collaborative space with amenities including a fitness center, nap room, and rock climbing wall.
Spectrum Terrace Pre-Lease
TGS’ recent real estate moves include a huge lease at one ground-up development just south of the 405 that counts its own fair share of amenities, as well as a tear-down project on a site it owns on the other side of the freeway.
It recently inked a deal to lease an entire building at the next phase of development at Irvine Co.’s Spectrum Terrace office project, the Business Journal has learned.
The under-construction office at 17500 Laguna Canyon Road will run about 115,000 square feet and is expected to be built by the end of the year.
It’s the first of three buildings that will go up in Phase 2 of Spectrum Terrace; Phase 1 is nearly full and will hold a full-building WeWork location and the new headquarters of big data technology firm Alteryx Inc. (NYSE: AYX), among others.
The TGS lease of the four-story building was confirmed by multiple real estate brokers familiar with the transaction, but not the tenant’s plans for the building.
Irvine Co. declined to comment, and TGS could not be reached for comment.
Brokerage data indicates the under-construction building to be fully leased, while the other two buildings about to be built at Spectrum Terrace are available for rent. The deal with TGS is the largest reported office lease signed in Irvine in the past quarter.
It’s not known whether TGS would use the Spectrum Terrace building just for its own operations, or if it has other plans for portions of the space.
The company, which uses computer algorithms to invest via a so-called “quant” strategy, is estimated to employ less than 100 people in the city.
The Spectrum Terrace building is large enough to hold 400 or more workers.
Pasteur Tear-Down
The Business Journal last reported on TGS in May, when one of its founders quietly snapped up a 125,000-square-foot building on the opposite side of the freeway, at 23 Pasteur.
San Francisco-based Wells Fargo, which had used the three-story building for auto financing operations, sold the office for $28 million. It’s next to a building used by Irvine retailer Tilly’s Inc. for its e-commerce operations.
The site’s now under construction. TGS has torn down the Wells Fargo building and adjoining parking structure.
A new data center is expected to replace the office, the city told the Business Journal last week. “The proposal is for a new 48,260-square-foot data center building, housing electrical equipment, limited office space and computers,” the city said. The project still needs planning commission approval, according to the city.
A data center would be in line with the company’s goal to bring scientists and engineers together, tackling “financial markets using complex models, custom technology, and huge amounts of computational horsepower,” it said on its website.
Its strategy is not unlike that of Newport Beach’s Ed Thorp, a prominent local hedge fund investor who has worked with the founders of TGS in the past.
“We use a scientific approach to solve challenging problems in finance and to develop software and technology solutions to implement our strategies,” the TGS website notes.
Billionaires
The T in TGS stands for Taylor.
Estimates of Taylor’s wealth range from $1.3 billion to multiple billions.
TGS first gained national attention in 2014 when a Bloomberg news report said that the hedge fund managers had “secretly directed one of the largest pools of philanthropic capital for years,” one it estimated at more than $13 billion.
The late David Gelbaum, as well as Andrew Shechtel, are the other founders of TGS, which has offices in Irvine and Princeton, N.J.
The company is looking to hire about a dozen local workers, primarily in engineering and research roles, according to its website.
“As an employer, we are small, discreet, and highly selective,” the company said on its LinkedIn page.
