One Year Ago
»» Several long/short equity firms, including Shumway Capital Partners, Glenview Capital Management and J. &. W. Seligman posted losses in their funds in May and June last year after getting hammered by negative macroeconomic trends. But many long/short equity funds ended the year in the black after making money in the final quarter.
It remains to be seen whether managers will be able to repeat that this year, with the markets in turmoil over Standard & Poor’s unprecedented downgrade of the U.S., political unrest in Europe, rising concerns over unemployment and the magnitude of the U.S. debt. The AR U.S. Equity index has lost 0.63% in May, 0.88% in June and 0.30% in July, though it’s still up 1.5% year to date through July 31.
»» Passport Capital won a $30 million investment from the San Bernardino County Employees Retirement Association of California for its Global Strategy fund. Passport’s assets and performance were growing at the time, as the firm had grown to $3 billion in July of last year from $2.37 billion in January, 2010.
Passport has continued to grow this year and had reached $4.8 billion under management as of July 1. The firm recently launched a new mortgage-backed securities fund, for which it has raised $100 million so far.
Five Years Ago
»» FrontPoint Partners expanded its manager roster with the addition of a portfolio manager and team of analysts from BKF Asset Management to focus on its consumer and industrial long/short equity strategy. The then-$5.6 billion FrontPoint had also added Kevin Caliendo from Salomon Brothers Asset Management to its healthcare team.
After growing to about $7 billion in assets towards the end of last year, FrontPoint had fallen to just $1.5 billion by July 2011. The firm endured a run on redemptions when the lead portfolio manager of FrontPoint’s healthcare funds, Chip Skowron, was charged with securities fraud, among other charges. Skowron allegedly received advance notice of drug-trial results from a French doctor concerning a company in FrontPoint’s portfolio.
FrontPoint, which has not been charged with any wrongdoing, dismissed Skowron and shut down its healthcare funds by January, and in May the firm decided to close most of its funds of funds and single-manager hedge funds after investors in several strategies pulled their money out. The firm is now only running its Quant Macro, Strategic Credit, Rockbay and Direct Lending funds.