Looking back at Scottwood’s slip and Ray Dalio’s decision to give away all his money

July 06, 2011   Josh Friedlander

This week, AR also revisits Goldman trader Ralph Rosenberg’s hop to R6, skip to Eton Park and jump to KKR.

One year ago

»» Scottwood Capital Management’s event-driven fund had suffered the worst month in its history, dropping 18.54% in May 2010. The fund fell for another three months and, despite gains in the second half of the year, ended 2010 down 6.44%.

Scottwood has had better luck this year, gaining 3.43% through May. The firm managed $541 million as of March 23, according to a regulatory filing. Scottwood declined to comment.

»» Several members of the hedge fund elite signed on to "The Giving Pledge," the philanthropic project started by Warren Buffett and Bill Gates whose billionaire signatories commit to giving away the majority of their wealth to the "philanthropic causes and charitable organizations of their choice either during their lifetime or after their death." Among those to commit at the launch were Laura and John Arnold, Jim and Marilyn Simons , T. Boone Pickens, Tom Steyer and (wife) Kat Taylor, and Julian Robertson Jr. (see brief dossiers on each here).

Leon Cooperman and Carl Ichan later signed the pledge. In April, Bridgewater Associates founder Ray Dalio and his wife, Barbara, also signed (here’s the full list).

Five years ago

»» Ron Resnick, a managing partner and the chief administrative officer at Highbridge Capital Management, left the firm to start his own hedge fund, AlphaWorks. The firm launched a market-neutral long/short equity fund near the end of 2007, but it did not survive the financial crisis. Fortunately for Resnick, he had simultaneously launched CounselWorks with Rosemary Fanelli, the former chief administrative officer and general counsel of boutique investment bank Allen & Company.

CounselWorks provides strategic business advice and regulatory compliance services to hedge funds, has a staff of 10 in New York, and additional personnel in Los Angeles and San Francisco. The company, which serves 70 clients, held its first conference (to be annual) in Montauk at Gurney’s Inn two weeks ago. The event featured keynote speaker Tom Ridge, the former Republican congressman, Pennsylvania Governor and Secretary of Homeland Security.

»» Ralph Rosenberg was preparing to launch R6 Capital Management, having recently left his role as head of global special situations investing at Goldman Sachs. He invested $20 million of his own money in the firm and, with fundraising, was managing $300 million by October 2007, but the flagship fund, which invested in distressed-loan portfolios, was up only 5% in its first 12 months. Near the end of 2007, Rosenberg announced his decision join former Goldman colleague Eric Mindich’s Eton Park Capital Management, which bought his firm’s portfolio of distressed assets. "Eric and I have known each other for over 15 years, have invested capital jointly and have sat on numerous committees together while we were at Goldman Sachs," Rosenberg wrote at the time. "We have dealt with success together and, more important, have navigated as partners through adversity. Eric and I trust one another completely."

Rosenberg joined Eton Park in 2008 and stayed for nearly three years, leaving in December 2010 when the firm decided not to pursue his idea of launching a commercial real estate fund. In March, Rosenberg joined private equity firm KKR to invest in real estate for the firm’s equity, debt and special situations funds.

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