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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