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Tuesday Sept. 27, 2016 www.bloombergbriefs.com Voyager Seeks Quants, Emerging Managers for Funds NUMBER OF THE WEEK BY HEMA PARMAR Voyager Management LLC, the $475 million fund of hedge funds, is seeking quantitative, sector-specific and emerging managers for its funds and separately $1.3 BILLION managed accounts, said Christopher Knight, the firm’s managing principal. For long-short equity and sector-specific managers, the firm is looking for smaller, Increase in assets at Paloma Partners emerging funds that manage between $250 million and $600 million in assets and that this year, defying a flight of capital don't have large amounts of leverage or place concentrated bets, Knight said in an from the global hedge fund industry. interview earlier this month. These funds can be more nimble and invest in smaller opportunities that larger managers can't, he said. WHAT TO WATCH "Over the past year, our firm has been moving away from mega hedge funds into smaller more niche-oriented ones," he said. "We are focused on increasing the Julian Robertson of Tiger Management diversification of strategies within our portfolios to include managers that have reduced will be interviewed on Bloomberg Radio volatility, less correlation, reduced crowding and who still provide attractive risk-adjusted tonight at 6 p.m. ET. Listen live on the returns." web here. Voyager is planning to add quantitative funds to two of its portfolios — Voyager Partners, which invests in generalist and specialist managers with a focus on long-short INSIDE equity funds, and the Voyager Global Master Fund, which invests in long-short equity, long-short fixed income, macro and event-driven managers. It also runs the more Latigo Partners is said to have gained concentrated equity-focused Voyager Global Select Fund, which may also be open to in August after raising energy exposure adding quants, Knight said. in June. Citadel is said to have posted The firm is looking to quant funds to add alpha and diversification to its portfolios as a 7 percent return through Sept. 23 for "we have seen very low correlation of returns between quant funds and more its fixed income funds: Returns in Brief fundamentally driven long-short equity funds," he said. Voyager, which has about 35 underlying managers, plans to make investments in up Teacher Retirement System of Texas to three new quant funds this year, and is open to rotating in new managers to replace said it's taking a leadership position in poorer performing ones. The firm is flexible when it comes to the asset size of the quant reforming hedge fund fees: From the managers, according to Knight. The due diligence process for new funds typically takes Minutes about two or three months, he said. Voyager was founded in 1997 by Knight and Lyle Poncher. Brevan is said to remove management fees for some investors: Fees Perry to Close Flagship Fund Amid Losses, Withdrawals Simon Finch, who manages about $3 billion for CQS in London, is leaving the fund: On the Move Activist investors double the chance of CEO exits, according to an FTI Consulting study: Activist Situations QUOTE OF THE WEEK “I have this hope that someone says, ‘I love what you guys did, your team did things that were completely different, and how can I participate with them in the Recent fund losses at Perry Capital, which is closing its flagship fund after 28 years, future?”’ followed a string of winning years. 2016 returns are through July. For more on this story, — Richard Perry on shutting his fund Perry click here. Capital RETURNS IN BRIEF Sept. 27, 2016 Bloomberg Brief Hedge Funds 2 RETURNS IN BRIEF Latigo Partners, the New York-based August Returns event-driven credit hedge fund, rose 5.7 percent in August in its Latigo Ultra Fund after raising its energy exposure at the end of June, according to a person familiar with the matter. The fund is up 13.2 percent in the first eight months of the year, the person said. David Ford and David Sabath are founding partners and co-portfolio managers. The firm, founded in 2005, managed $556 million as of Jan. 1, according to regulatory filings. Steve Bruce, a spokesman for the firm with ASC Advisors, declined to comment. — Melissa Karsh Citadel, the $26 billion hedge fund run by Ken Griffin, posted a 7 percent return this year through Sept. 23 for its global Year-to-Date Returns to End-August fixed income funds, according to a person with knowledge of the returns. The funds have about $1.8 billion, said the person. Citadel is based in Chicago. — Saijel Kishan Funds not mentioned in the accompanying text on this page were reported in other issues of the Brief or in Bloomberg News stories. For questions, e-mail [email protected]. FROM THE MINUTES The Ohio Police & Fire Pension Fund is set to vote on manager reviews of Bridgewater Global Macro, MacKay Shields High Yield Active Core and Penn Capital at its Sept. 28 investment committee board meeting, according to the meeting agenda. The Teacher Retirement System of Texas is taking a leadership position in reforming hedge fund compensation, according to the conclusion of a presentation prepared for the investment committee's Sept. 22 meeting. As of June 30, TRS has about $10.8 billion in hedge fund assets, representing about 8.3 percent of the trust, according to the presentation, which also found that directional hedge funds underperformed expectations in the 12 months ending in June. — Melissa Karsh and Ainslie Chandler Sept. 27, 2016 Bloomberg Brief Hedge Funds 3 CLOSURE BY KATIA PORZECANSKI AND KATHERINE BURTON Sept. 27, 2016 Bloomberg Brief Hedge Funds 4 CLOSURE BY KATIA PORZECANSKI AND KATHERINE BURTON Perry Capital Closing Flagship Fund After Almost Three Decades Richard Perry, percent of its workforce in a shakeup in against subprime mortgages, according one of the biggest August. And Brevan Howard Asset to people familiar with the firm. The names in hedge Management plans to stop charging following year the fund plunged 28 funds, is calling it existing clients management fees on any percent, breaking its winning streak. quits after 28 years. new investments they make in two of its Performance rebounded for a time, Perry, 61, is hedge funds, according to a person with then took a turn for the worse in 2014, winding down his knowledge of the matter. after Paul Leff, who founded the firm New York-based The fund will return a substantial with Perry, stepped back from his role as flagship fund as the amount of its client money next month, co-chief investment officer. Subsequent industry confronts according to the letter. Perry’s fund has changes in top-level management over one of the most been selling out of investments in recent the next two years added to investors’ Source: Bloomberg/ Amanda Gordon tumultuous periods months. In the quarter ended June 30, it frustrations, former clients said. Richard Perry in its history. In a had dialed back its U.S. stock David Russekoff became sole CIO letter to investors investments by 40 percent, exiting after Leff’s departure, but his reign was Monday, he said his style of investing no positions including hospital operator HCA short-lived. He left in late 2015 amid the longer worked. Holdings Inc. and pipeline company firm’s worst year since 2008. He was “Although I continue to believe very Spectra Energy Corp., according to its replaced by a three-person investment strongly in our investments, process and latest filing. committee composed of Todd Westhus, team, the industry and market headwinds Maulin Shah and Todd Gjervold. against us have been strong, and the Gjervold departed the firm in July, timing for success in our positions too according to his profile in LinkedIn. Since unpredictable,” Perry wrote in the letter. "... the industry and the end of 2013, the fund has tumbled It’s a remarkable turn of events for 18.4 percent. Perry, who is one of the longest-standing market headwinds In recent years the firm profited from hedge fund managers. He was part of an investments in distressed Argentine and elite group of proteges of Robert Rubin against us have been Greek sovereign bonds and preferred at Goldman Sachs Group Inc. who shares of Fannie Mae and Freddie Mac. went on to run marquee hedge funds. strong, and the timing Gains were outweighed by losses on Over the fund’s first two decades, Perry bets including Williams Cos., Energy posted an average return of 15 percent for success in our Transfer Equity LP, International Paper without ever having a down year. Co. and Puerto Rico. But lately Perry Capital and many positions too Before starting his hedge fund, Perry rivals have struggled to persuade had a decade-long career at Goldman investors that hedge funds are worth the unpredictable." Sachs, where he worked on Rubin’s high fees they charge. Over the past year arbitrage desk investing in the stocks of — PERRY IN A LETTER TO INVESTORS his fund, which manages about $4 billion, merging companies. has lost more than half its assets. In an interview Monday, Perry said Fortunes changed for Perry amid a while he is focused on the current Perry Capital’s less liquid positions will reshuffling of top executives that started investments, “I have this hope that be sold over the next year, or longer. in 2014, and the fund, which focuses on someone says, ’I love what you guys did, Some of them, including its remaining investing around corporate and your team did things that were preferred shares in Fannie Mae and sovereign events, has lost money in each completely different, and how can I Freddie Mac, “will take time, energy and of the last three years.