A star investor is launching a new hedge fund with the backing of his $3 billion former employer

A star investor at a $3 billion hedge fund is going it alone with the backing of his former employer.

Joe Cornell, a managing director at Chilton Invesment Company, has left to launch an equity fund making long and short bet, according to three people familiar with the matter. The fund will use a generalist, fundamental strategy.

Richard Chilton and his firm are backing the New York-based start-up, which is set to be called Bluegrass Capital Partners.

"I have a lot of confidence in Joe's abilities," Chilton told Business Insider in an email.

Chilton launched his Stamford, Conn.-based firm in 1992 with a focus on fundamental equity research.

Cornell worked at Chilton from 2011 up until the spring of this year and was promoted to managing director in January 2014, one of the people said. Before that, he was an investment analyst at Shumway Capital Partners from 2010 to 2011.

Morgan Stanley and Goldman Sachs are set to be prime brokers on the launch, according to one of the people. Prime brokerage is a bank service that helps facilitate trades for hedge funds.

Cornell joins other hedge fund alums that are prepping new stock funds, including Seth Wunder of Contour Asset Management and Samantha Greenberg of Paulson & Co.