GLC, the multi-strategy firm led by Lawrence Staden that was one of London’s earliest and most colourful hedge fund groups, is to close its doors and return capital to investors after more than 20 years in business.
The firm has concluded that the significant structural market changes of the last few years are unlikely to create the same kind of conditions for its short-term quant trading strategies in the future that had previously enabled Staden and his colleagues to deliver excellent results for investors over most of the past two decades.
Although conditions for its main systematic strategies have been tough for the past two or three years, the firm achieved flat or modestly positive performance across the board last year – and GLC’s assets under management were still at about $1 billion when the decision to stop trading and liquidate the funds was taken this month.
Established in 1992 by Staden – initially under the umbrella of GNI – GLC grew to manage a range of strategies encompassing equity statistical arbitrage, short and mid-term CTAs and discretionary macro.
The firm ran a variety of systematic and discretionary investment programmes via a range of seven commingled single-strategy and multi-strategy funds – as well as bespoke managed accounts for institutional clients – and employed 40 people.
Over the years GLC achieved impressive long-term results for its investors – not least in the meltdown year of 2008, when most of its funds substantially outperformed the markets and other hedge fund strategies during the global financial crisis.
However, recent performance had gone off the boil during a very challenging time for systematic trading strategies generally – and the last two or three years have proved to be hard going for most of the strategies run the group.
Staden has apparently concluded that the returns that his trading strategies made in the past are unlikely to be repeatable for the foreseeable future – especially in the CTA and stat arb space where GLC had its origins.
"Market opportunities have changed for our short-term strategies and we don’t believe in any imminent improvement in such conditions – so we have decided to return all capital to investors,” the firm said in a statement.
Before establishing GLC in 1992, Staden worked at Bankers Trust, where he was the managing director in charge of London proprietary trading, UK and US government bond market-making and analytic research.
He initially set up GLC within financial services group GNI, in partnership with Gilbert Hall – who left the firm several years ago – before spinning the firm out as a standalone business.
Investors have been informed of the decision and the GLC funds have already been fully liquidated and are in cash, with plans to return all capital to investors at the next available date.
Besides shutting the systematic strategies, GLC is also closing down its discretionary global macro fund run by well-known former Deutsche Bank economist Steven Bell.
It is understood that Bell is looking to continue running money with another firm, while GLC’s principals are concentrating their efforts on finding new opportunities for the firm’s staff following the decision to close.