More high profile hedge funds shut down

Tools

Goldman Sachs employees are not guaranteed they will retain anything resembling a Midas Touch after they leave the bank.

Consider the fate of former Goldman Sachs proprietary trader Pierre-Henri Flamand, who left the company to start his own hedge fund. The launch of Edoma Partners was in fact one of the highest profile hedge fund launches of 2010, and Flamand raised a whopping $2 billion.

But after posting a series of poor returns, seeing more investors demand redemptions and watching two partners defect, Flamand decided the best thing to do was to shut the fund. He is hardly alone in exiting the business amid a tough year for the industry.

CNBC notes some others: "Greg Coffey, one of the industry's best known figures, decided to retire early and liquidate one of his funds at Moore Capital, sources said earlier this month. That followed Driss Ben-Brahim's decision to retire from GLG, the hedge fund he joined in 2008 and now owned by Man Group." 

I noted earlier that Octavian Advisors has decided to shut down. Others will likely follow suit at some point, even though one could argue that the fundamentals in the industry look strong. But such trends favor the strong only. Weak performance will spell doom for many. So far this year, hedge fund on average have generated 4.86 percent this year, compared with roughly 12 for the S&P 500.

For more:
- here's an article on Edoma from Bloomberg

Filed Under