The Morning Brief: Paul Tudor Jones Lowers Fees Again

February 28, 2017   Stephen Taub


These are humbling times for one of the hedge industry’s biggest icons, Paul Tudor Jones II’s Tudor Investment Corp. The firm cut its fees for the second time in less than a year, reducing its management fee to 1.75 percent for its largest investors and its performance fee to 20 percent for all, according to the Wall Street Journal. As a result, the hedge fund firm, which once charged some of the highest fees, is now in line with industry norms. In July, Tudor lowered its fees to 2 percent and 25 percent, down from 2.75 percent and 27 percent at the start of 2016, according to the report. Last summer Tudor also cut its staff by 15 percent. For many years Jones was an industry outlier, charging a 4 percent management fee and 23 percent performance fee. Mediocre performance over an extended time has no doubt irked some of its investors and made it increasingly difficult to justify the high fees. His main fund, Tudor BVI Global Fund was up less than 1 percent last year and has posted low-to-mid-single digit returns in four of the past five years. And this year the fund was down about 1.4 percent through mid-February.

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Talk about bad timing. Point 72 Asset Management said that as of February 17, it held a little more than 2.34 million, or 14.8 percent, of Build-A-Bear Workshop’s shares. However, on February 21, the next trading day, shares of the retailer known for allowing customers to custom-design their own teddy bears plunged 10 percent. Then, after surging nearly 24 percent last Friday, the stock Monday dropped more than 8 percent, to close at $9.25. At year-end, Steven Cohen’s family office did not own any shares.

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Shares of controversial drug maker Valeant Pharmaceuticals International surged 3.3 percent Monday to close at $16.71. The company is scheduled is report quarterly earnings before the market opens Tuesday morning. The stock is up about 15 percent year-to-date.

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Shares of Restoration Hardware rose more than 4 percent Monday day after jumping nearly 25 percent on Friday. Investors are apparently very excited about the strong quarterly results reported by the high-end home furnishings company. As we earlier noted, Balyasny Asset Management owned 5.4 percent of the stock as of the end of January, while Citadel was the tenth largest shareholder at the end of the year.


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