Looking back on Paulson’s award-winning streak and Shumway's sayonara

November 15, 2011   Rob Copeland


AR also revisits an ill-timed bet by Pershing Square.

One year ago
»» John Paulson and Ray Dalio's firms were among the big winners at the sixth annual AR Awards, where more than 350 attendees feted the best of hedge funds amid a boom year for the industry.

Twelve months later, Dalio's Bridgewater Associates is still on top, having picked up its second consecutive Management Firm of the Year trophy at the Eighth Annual AR Awards, which were held last week at the Mandarin Oriental hotel in New York. For the first time in five years, Paulson's firm was nowhere to be found. Replacing Paulson as the winner of Best Long-Term Performance was the York Credit Opportunities Fund. The Renaissance Institutional Equities strategy took the coveted Fund of the Year prize.

»» Shumway Capital Partners told investors they had until early December to submit redemption requests or else tacitly approve the firm's announced restructuring, in which founder (and Tiger cub) Chris Shumway stepped down as chief investment officer. The firm's SCP Atlantic fund was down 1% for the year at the time, having been whipsawed by difficult market conditions earlier in the summer.

By the end of February, Shumway had written to investors again, this time to notify them the firm was returning all outside capital amid redemption requests that totaled 40% of Shumway's $8 billion in assets. Shumway continues to run money for himself and has seeded a few spinouts, but is no longer a part of AR's Billion Dollar Club.

See also:
Shumway tech chief Choudary preps Eastwind Global
Chris Sumway to investors: I'm not going anywhere
Shumway equity fund stung by long positions


Five years ago
»» Bill Ackman's Pershing Square Capital said that Borders was its next activist holding.

Speaking at the Value Investing Conference, Ackman said that compared with its better-known rivals, Borders was a classic "number two business" that had long been overlooked. "I think the typical sentiment here is it's not a great business," he said. Pershing Square at the time had amassed 11% of Borders' shares. Ackman continued to strengthen his ties to the ailing company; a Pershing partner, in fact, became Borders' chief executive officer in 2009.

But Borders filed for bankruptcy earlier this year, likely wiping out Ackman's equity investment. Perhaps not coincidentally, his $9.9 billion flagship multistrategy fund is down 3.5% for 2011 after suffering heavy losses in the first half of the year, compared with a 1.35% gain for the AR Multistrategy Index. A Pershing Square spokeswoman declined to comment.

See also:
Ackman, Einhorn outline top plays at annual summit



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