|| 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
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