One year ago
»» Felled by a government investigation
into alleged insider trading, $3.8 billion
Level Global Investors told clients that, despite notbeing
charged with any wrongdoing, it would shut down
rather than deal with what it expected would be significant
redemption requests . "The persistent threat of capital leaving
the Funds would prevent us from taking risk and investing with
conviction the way we always have,"
wrote founder David Ganek, a veteran of SAC Capital
Shutting down did not keep the firm out of the headlines.
Anthony Chiasson was arrested by the FBI last month in New
York for allegedly trading on illegal tips related to Dell, the
technology company, while he was at Level Global. Ganek was not
accused of wrongdoing. Level Global’s employees
have since scattered; among them,
William McLanahan moved to Moore Capital Management to run
a four-person equity team.
Big public pensions went direct to FBI-raided hedge
Eric Mindich’s then-$14 billion Eton Park Capital
Management considered launching an emerging markets fund to
co-invest alongside its main funds. The launch happened in
September, with $250 million slated for private investments in
emerging markets, according to the firm’s yearend
letter to investors.
Little else went well in 2011 for
Eton Park, which fell 11.15% for the year, declined by $2
billion in assets and watched
employees exit for other firms. Investments in emerging
markets were the worst-performing positions taken by the New
York firm’s flagship fund last year, the letter
said. "In some cases, the changed economic and political
environment delayed or thwarted the catalysts behind our
theses," the firm wrote of emerging markets last month. "In
other cases, we were simply wrong."
Eton Park had a minor bounce back in the first month of 2012
along with the broader market, returning an estimated 2.80%,
according to an investor. That compares with a 1.96% gain for
AR Multistrategy Index.
A spokesman for Eton Park declined to comment.
Five years ago
»» Third Avenue Management founder
Martin Whitman conceded that his firm’s focus on
distressed investments was a "high-beta business" that
included an elevated "strike-out rate." He said that "when we
hit, we tend to hit home runs…but we strike out a lot
Whitman was soon to be among those sitting on the bench. In
he stepped down as co-chief investment officer, but
remained co-portfolio manager of the Third Avenue Value Fund.
he left the field. Whitman handed the bat to his
co-portfolio manager Ian Lapey, who will have sole management
of the fund. Whitman now serves as the
Third Avenue’s largest hedge fund,
the $289 million Global Value Fund, is coming off a heinous
2011. It collapsed 24.87% last year, compared with a 4.70% drop
AR Global Equity Index. The fund was up 7.56% in January
2012, according to the
HedgeFund Intelligence database.
In a statement, Third Avenue’s chief executive
David Barse told AR: "In 2007, we did believe there
would be a lower hit ratio. But, we learned some important
lessons during the financial crisis and we expect our hit ratio
to be higher in 2012 and beyond."
Third Avenue brings on credit expert duo
Third Avenue mulls distressed launch
Third Avenue hires Goldman associate