Going long: Managers collect fees and avoid shorts and high-water marks

October 29, 2009  


As institutional investors pull hundreds of billions of dollars from hedge funds and while a bull market is under way, the answer is simple: Go long.

By Katrina Dean Allen

When William von Mueffling, the founder of Cantillon Capital Management, announced in June he would shut his hedge funds and convert into a long-only traditional money management shop, the investment community was stunned. Cantillon was the first of the über launches, coming out of the gate in 2003 with what was then a stunning billion dollars.

Von Mueffling had been a star at Lazard, where he'd made his bones shorting the tech bubble. But Von Mueffling had always had a fundamental approach to stock picking and investors say he liked to hold onto positions instead of trade-none of which served him particularly well last year. In 2008, Cantillon Europe, Cantillon World and Cantillon U.S. were down 10.72%, 9.25% and 16.27%, respectively.

Cantillon U.S. was liquidated at the end of 2008, while the other two funds have been converted to cash and...

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