Moore Cuts Amaranth Refugees After Big November Loss
Another high-profile hedge fund bites the dust, throwing about 15 traders and staff out of work.
Moore Capital disbanded its year-old Canadian hedge fund group, which had managed $1 billion for other Moore funds, reports Bloomberg News. The cause was a reported 15 percent loss in November, attributed to wrong-way bets on stocks and convertible bonds. Moore Capital notified employees Wednesday that the Toronto office will close this month.
In an interesting twist, the Toronto group's leader and many team members had previously worked at last year's marquee hedge fund disaster - Amaranth Advisors. In September 2006, Amaranth collapsed after losing a record $6.6 billion from positions in natural gas futures.
The leader, 38-year old Manos Vourkoutiotis, "joined Moore Capital after the failure of Amaranth, where he oversaw investments in Canadian debt, equities and derivatives for six years," Bloomberg said. "Moore Capital hired him and other former Amaranth traders to invest in a range of securities including distressed debt, convertible bonds and equities."
While hedge funds haven't been immune from the turmoil that beset financial markets during the second half of 2007, fund returns on the whole have been holding up well and recruiters say hiring hasn't slowed.
Investment losses in August forced several fund companies to shut their doors, and the sector lost 1.4 percent on average in November, according to Hedge Fund Research data cited by Bloomberg. But the average hedge fund dropped less than the S&P 500 stock index last month, and has returned 10.2 percent for the year to date. Moore Capital, launched by famed trader Louis Moore Bacon in 1990 and now managing more than $13 billion in assets, is outperforming the broad fund sector despite the Canadian misstep: Its fixed-income fund is up 13 percent year-to-date and its Moore Global Investment fund is up 15 percent, according to Bloomberg.