As smaller hedge funds return cash, ex-Goldman Sachs MDs and others are precarious
When Eugene King, a Goldman Sachs' managing director and London-based metals and mining analyst, left the bank after a decade in 2020 to join Lijaro Asset Management, he presumably thought it was a good idea.
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Lijaro, an equity long short hedge fund founded by ex-Balyasny portfolio manager Stephen Irvine, generated returns of nearly 11% in 2020 according to Bloomberg, followed by nearly 7% in 2021. In March 2024, however, it closed its doors after two years of losses. The FCA Register shows that King, along with most other staff, left in the same month. It's not clear what King, who was deputy CIO, is doing now; he didn't respond to a request to comment.
Lijaro isn't the only non-multi strategy hedge fund having a difficult 2024. Earlier this month, it emerged that Nekton Capital, an equity market neutral hedge fund, which once managed $1bn, is returning money to investors after struggling to generate steady gains. The whereabouts of people like Jamie Gnodde, who joined Nekton after a brief career at Goldman in London are unknown. Nekton didn't respond to a request to comment. It will continue to manage funds for its founder, Christophe Aurand.
In the past five years, Hedge Fund Research says that more than 3,000 funds have closed. For a while, though. life at Lijaro and Nekton seems to have been good. Companies House data shows that Nekton Capital Limited paid 14 people £6m in 2023, an average of £428k per head. Lijaro distributed £1.6m to its members the same year.
The potential precarity of smaller funds comes amidst suggestions that bigger multistrategy hedge funds are becoming more cautious about hiring, and rumours of apprehension about joining them anyway, what with their reputation for churning through poor performers. Even so, people like Ashik Kurian, a former Goldman equities analyst, and a former Credit Suisse director, both of whom left Lijaro in 2022, are both happily still employed by Millennium in London.
Equities professionals who want to avoid multistrats and take their chances at growing London hedge funds still have options. Ilex Capital Partners, founded last year by ex-Citadel traders Jonas Diedrich and Dave Sutton, is reportedly planning to raise an additional $1.5bn; it will presumably need some more people to manage it.
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