Another hedge fund bites the dust.
Tourbillon Capital — led by SAC Capital alum Jason Karp — is shutting down after six years, according to a letter sent to investors Oct. 8.
“We have recently not delivered the results that you expect of us and what we know we are capable of,” Karp wrote, adding that the fund is starting a “prudent” wind-down of assets and will be returning more than $1 billion to investors by year-end.
Tourbillon is the third major hedge fund closure this month.
San Francisco-based Criterion Capital Management announced plans to shut down last week on the heels of $12 billion Highfields Capital announcing its plans to shut down as well.
The 3.2 trillion hedge fund industry has had a tough run in recent years as investors have been able to get favorable returns in low-cost index funds without the hefty hedge fund price tag.
For Tourbillon, which “delivered outsized returns” in its first three years, recent returns have been underwhelming. The fund shed 2.6 percent through August, according to a person familiar with the matter, while the S&P 500 gained 8.5 percent over the same period.
Annualized returns for Tourbillon averaged 12.3 percent, the person said.
Although Karp plans to return investor money, he is not fully out of the game.
Karp and his partners plan to continue investing their own funds in a “radically different, unconstrained manner.”
Separately, the hedgie plans to invest in health and wellness companies — including Hu Kitchen, a health food restaurant and store he launched with his family six years ago.
Credit: NY Post</>
via USAHint.com
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