A joint venture involving Caxton Associates has birthed a startup hedge fund that has so far raised $500 million.

The endeavor, named Lucidus Capital, is a fixed income strategy with Darryl Green, the head of the Caxton London operation and Caxton portfolio manager Geoffrey Sherry in charge.

Green and Sherry will continue run a $1 billion fixed income hedge fund for Caxton. Sherry is based out of New York.

Caxton will retain a 25% ownership in Lucidus Capital, which will use the Caxton back office.

Green worked as chief investment officer for the Donaldson Lufkin & Jenrette fixed income group before founding Green T Asset Management in 1998. The company melded with Caxton in 2002. Sherry joined Caxton from JPMorgan Chase.

A large hedge fund company will often finance a high-performing portfolio manager or trader in launching a spinoff or startup in order to retain access to their talent. GLG, the high-powered London hedge fund, began as a spinoff from investment bank Lehman Bros. Ospraie Management began as the brainchild of Tudor Investment Corp. breadwinner Dwight Anderson, who took his hedge fund independent in 2004. In September, Dorsal Capital Management, a technology sector hedge fund based out of California, got an investment from longtime boss Steven Cohen, head of SAC Capital.

Bruce Kovner founded Caxton in New York in 1982. It has $14 billion. Kovner himself has a net worth estimated around $2.5 billion.

Bloomberg first reported on the formation of Lucidus Capital.