Diamondback Lays O 5 Staers
has dismissed at least ve investmentstaers — including two portolio managers — in the wake o a sharp third-quarter loss.Te portolio managers are
who special-izes in energy stocks, and
Also let go was
whose position combined the roles o analyst and porto-lio manager. In addition, two analysts who worked under Fein-stein,
were shown the door.One source speculated the layos could be tied to expecta-tions o heavy yearend withdrawals — suggesting the redemp-tions could reach $1 billion. But a person close to the rm saidthe cuts were perormance related. While Diamondback doesexpect “some redemptions,” she said, “it’s nowhere near thetune o $1 billion.” She noted that the rm’s October peror-mance was positive.Te deadline or limited partners to submit yearend with-drawal notices is Nov. 15.In any case, Diamondback is known or being quick to cutinvestment staers who don’t perorm. Te Stamord, Conn.,rm, which has about $3.5 billion under management, put uprelatively strong returns through the rst hal. But like most o its peers, it suered losses amid the market turmoil in Augustand September. As o Sept. 30, Diamondback Oshore Fundwas down 5.1% or the year.Diamondback was under intense pressure ollowing
raids o its oces and three other hedge und rms in Novem-ber 2010. But while the other rms subsequently went under,Diamondback survived — and by August was elding reshsubscription requests. Te rm also started hiring again.In September, Diamondback paid $1.1 million to settle
charges that a ormer employee,
had protedrom insider trading. Scolaro pleaded guilty to criminal charg-es in May. Te rm itsel wasn’t accused o wrongdoing.Founded in 2005, Diamondback is led by ormer
Ex-Millgate Partners Prep Vehicle
executives are crafing a hedgeund that would reprise Millgate’s strategy o investing in non-U.S. stocks.Te team, led by
o Boston shortly afer Millgate began winding down its operationsearly this year. Indeed, marketing documents or LRV’s plannedund have been in circulation at least since May. But one sourcesaid Rooney and his partners,
Erik Van derSande,
have had limited success raising capital so ar — reect-ing diculties most startups ace these days.Rooney and his team believe non-U.S. stocks present a great-er opportunity set than U.S.-listed shares. Tat’s partly becausear more stocks trade on non-U.S. exchanges — about 75% o the global total — and most o those companies receive little,i any, analyst coverage. LRV’s ocus will be on liquid shares o companies with market capitalizations o $500 million to $10billion, representing a universe o about 4,200 stocks. Te undwould hold 30-50 positions, roughly evenly divided betweenlongs and shorts.LRV is trying to lure early backers with a so-called ound-ers share class. While the marketing documents don’t spell outthe terms, such share classes typically involve reduced manage-ment and perormance ees, among other incentives.Millgate was led by
who co-ounded the rm in1997 afer covering international stocks at
Julian Robertson’sTiger Management.
At its peak, Millgate had about $2 billion o assets, which it managed rom oces in New York and London.Te decision to shut down the operation ollowed two years o poor perormance, including a loss in 2010 — when the HFRIFund Weighted Composite Index rose 10.5%.Rooney, Lottner and Van der Sande all started at Millgatein 2002, and all were later promoted to partner. Rooney, LRV’schie investment ocer, lef Millgate earlier this year.Van der Sande, who is chie executive o LRV, lef Millgatein 2007 or a senior-analyst position at
Carlyle Blue Wave.
Mostrecently, he was co-portolio manager and senior analyst at
Lottner, who lef Millgate last year, is now director o re-search at LRV.
Pamli Plans to Add Marketing Chie
has recruited a ormer
col-league to oversee und raising at his new hedge und rm.
who most recently worked at
will join Syed’s
o New York upon completion o a gardening leave. His duties at Pamli will encompass businessdevelopment, marketing and investor relations.Te two met when Brauer joined Highbridge about veyears ago. Syed was a Highbridge portolio manager who ranat least two credit-product vehicles beore leaving last year toset up Pamli.Syed has had little trouble raising capital or his Pamli Glob-al Credit Strategies Fund. Te vehicle currently has about $125million under management, and Syed expects to take in $10million to $20 million o resh capital beore yearend. Te undlaunched with a sizable seed investment rom
New Alpha AssetManagement.
Investors have been drawn by Syed’s Highbridge pedigree,as well as his early returns at Pamli. Te und was up 10.1%through Oct. 31.Syed apparently eels the und is now large enough to justiyhiring a ull-time marketing and investor-relations proession-al. Syed had been handling those unctions himsel.Syed trades a wide range o credit instruments, rom corpo-rate bonds and structured products to emerging-market sover-eign debt. Beore starting at Highbridge, he was a member o
proprietary loan-trading group.Brauer spent the past 18 months as a marketer in
Alternative Capital Markets group, which managesunds o hedge unds. Earlier, he worked at
or about six years.
November 2, 2011