|| Late Traxis founder Barton Biggs. Photo:
Traxis Partners apparently could not survive the
death of its founder, Barton Biggs.
The Greenwich, Connecticut–based hedge
fund firm disclosed Wednesday that it has liquidated all of its
funds for which it was the investment adviser and is winding
down its operations.
Traxis’ closure is another reminder
that it is difficult for a hedge fund firm to outlive the
founder when his name is on the door and its investment
strategy is identified with that individual.
Biggs, a fitness buff, died suddenly in July 2012
of a staph infection shortly before a planned climb to Machu
Picchu, the ancient Inca city in the mountains of Peru. Amer
Bisat, a managing partner at Traxis, was confident at the time
that the hedge fund firm founded by Biggs in 2003 would
successfully transition to a new management team.
At the time, Bisat, Biggs’s heir
apparent, had been quietly playing a major role at the
then-$1.3 billion firm, accompanying Biggs to investor
meetings, managing the research effort and overseeing the
firm’s finances for a year and half before the
founder’s unexpected death. As far as Bisat was
concerned, Traxis could seamlessly execute a successful
But he had a major hurdle to vault. Traxis was
still clearly identified with Biggs, the former Morgan Stanley
market strategist who was a brilliant predictor of major market
events. Biggs correctly called the growth of emerging markets
like China before U.S. businesses flocked there, and he
telegraphed the collapse of the technology bubble years before
As a 30-year money manager, Biggs was widely
respected on Wall Street for his macro skills. It was Biggs who
had the longtime relationships with investors who entrusted
their money to him year after year.
Sure enough, earlier this year we reported that
Traxis’ assets had fallen below $400 million, down
more than 70 percent at the time of Biggs’s death.
Investors had apparently decided that Traxis without Biggs was
just another among the thousands of small hedge fund firms.
The firm’s demise is yet another
lesson for hedge fund superstars who want their firms to
outlive them. They must groom an obvious successor who is made
known to their investors as well as to the outside world.
It is not easy. Few firms have pulled this off.
Over the years Highbridge Capital Management has been able to
survive the departure of one of its co-founders, Henry Swieca,
partly because the other founder, Glenn Dubin, continued to the
run the firm after it was acquired by J.P. Morgan Asset
Management. Dubin and Swieca also were not the ones pulling the
trigger on individual investments every single year.
Multistrategy firm D.E. Shaw & Co. has long
thrived after founder David Shaw moved on to his other
interests. And now Caxton Associates is having its best year in
nearly a decade under Andrew Law, who took control of the firm
at the beginning of 2012 after founder Bruce Kovner