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Multi-manager firm says performance has not kept pace with expectations and cites cost of attracting traders

London-based hedge fund firm Eisler is shutting down amid a period of disappointing performance and the rising cost of attracting top traders.

The firm, which managed about $4bn in assets last year, has suspended investor redemptions from its multi-strategy fund to enable it to wind down its portfolio in an “orderly manner”, according to an investor letter seen by the Financial Times.

“[Recently] our performance has not kept pace with either our or your expectations,” said Edward Eisler, the firm’s chief investment officer and founder, in the letter.

Eisler, the former co-head of Goldman Sachs’ global markets division, had been trying to build a multi-manager hedge fund to compete with industry giants such as Citadel, Millennium and Point72, launching his fund in 2021.

Unlike other hedge funds that tend to specialise in a specific strategy or asset class, multi-managers have tens if not hundreds of teams of portfolio managers supported by analysts which trade multiple assets. But amid a fierce war for traders able to deliver big profits, Eisler had struggled to balance the expenses of hiring and retaining portfolio managers while maintaining a cost structure that was “acceptable” to its investors, the letter said.

“After careful consideration of these factors and others . . . we are no longer confident of our ability to achieve the fund’s investment objective of delivering superior absolute returns,” said Eisler.

The fund gained 3 per cent last year, 9.8 per cent in 2023 and 15 per cent in 2022, said people familiar with the matter. In the letter, Eisler wrote the fund delivered a compound net annual return of 7 per cent since inception in 2021.

The letter added the firm expected to wind down the fund’s portfolio by the end of the year, with initial payments to investors to follow “shortly thereafter”. After this, the firm said it would wind down any remaining investment vehicles and operations of the group.

Eisler declined to comment. The news was first reported by Bloomberg.

The decision underscores the intense competition in the multi-manager sector. The firm passed on most costs directly to investors instead of charging a management fee, a common practice among the industry’s biggest groups.

While the multi-manager sector has been the hottest corner of the hedge fund industry in recent years and top funds have generated huge profits for investors, the high costs these firms incur to build up top trading teams and technology systems can backfire if they fail to deliver strong performance.

The Paris location, called La Piscine, was designed by Christian Liaigre.

PARIS — Augustinus Bader is opening its largest branded spa, called La Piscine, at the Hôtel Costes in Paris on Monday.

The sweeping 10,350-square foot location, on the hotel’s minus-one floor, has seven treatment rooms, including one double.

Charles Rosier, Augustinus Bader chief executive officer and cofounder, worked closely with Jean-Louis Costes and his wife Marie-Laure Ettori on the spa, which was designed by Christian Liaigre. His furniture decorates the place.

There are two reception areas, plus a view onto the 65-foot pool, open to hotel guests.

Rosier began talking with Costes about the idea of a spa in 2019, a year after the beauty brand was launched. More recently, enormous work was done at the hotel. Its spa area’s footprint was tripled as the hotel expanded into neighboring buildings. The pool size was modified, as well, and a gym implemented.

After visiting the site for four years, Rosier said: “It’s very exciting to see it come to life.”

Christiane Werron, executive director global education and spa distribution at Augustinus Bader, said La Piscine is meant to make each guest feel like they have entered their own sanctuary.

“We have an outstanding kind of architecture that is bringing this indulgent touch to every client that enters the spa area,” she explained.

For protocols, she took a cue from the Augustinus Bader method, which supports skin in its daily renewal process, explained Werron. That’s boosted by the brand’s proprietary trigger factor complex, or TFC8, which acts on cellular communication and repair.

The protocols are personalized for each spa partnership, which includes iconic hotels such as Claridge’s and the Corinthia in London, The Mark hotel in New York, and Bulgari Hotels in Milan and Rome, for instance. Altogether, Augustinus Bader is in around 100 spas worldwide.

The brand runs, as well, The Skin Lab in London and New York.

Augustinus Bader bespoke treatments start with a skin diagnosis. “We are then able to give proper consultation to the guest when it comes to four different treatment options and the possible add-ons,” said Werron. “We always ask the client what and how do you like your skin to look and feel afterwards?”

Alongside facials there are also full-body experiences. For them, high-tech devices are mixed with manual treatments, such as cleanses, masks and fascia-stimulating massage.

The hour-long Essential facial was conceived to activate, regenerate and revitalize skin using TFC8 technology. It costs 280 euros. The 90-minute Ultimate facial is for resculpting, firming and rejuvenating skin. That entails TFC8, as well as Raja Medical technology, ultrasound and microcurrent, and is 420 euros.

The AB Signature body treatment, for face and body, uses a mix of technologies. The two-hour treatment goes for 480 euros.

The spa at the Costes is the only location in France to boast the Bewei radio-frequency device for hand treatments. A half-hour session runs 130 euros.

It is also the first spa country-wide to offer the Absolute Glow Vitamin C treatment, which is combined with Raja Medica microdermabrasion technology. The 75-minute protocol is priced at 350 euros.

The menu of purely made-to-measure treatments includes massage, osteopathy and physiotherapy consultations. A ritual and massage for feet, manicure and pedicure, plus other additional services, round out the offer.

Augustinus Bader, which has always been rooted in science, recently partnered with Deepak Chopra on a health span and longevity-related AI platform, called AB Chopra Epigenetics.

“Some of the latest devices we’re identifying and working with could be used in such a [spa] space, as well,” said Rosier. “So that’s going to be very interesting and exciting. The plan is really to constantly update the offer with the latest technologies.”

He considers spas as an elevated, curated experience for people to discover a brand.

“You have time to see the effect of the product on your skin,” said Rosier, adding it also gives the possibility to talk about the brand with a practitioner while one’s relaxed.

“We all have these hectic lives, and when we give ourselves the time for a facial treatment or massage — me time — it’s a very special moment,” he said. “To be part of that experience for us is obviously a privilege.”

L’opérateur télécoms avait acquis les trois quarts du capital de cette start-up, devenue Free Pro, pour se développer sur le marché des entreprises. Mais il a raflé le dernier quart restant à bas prix en accusant le fondateur de faute grave.

Free contre Free Pro. L’opérateur télécoms a été condamné devant la cour d’appel de Paris ce 16 septembre dans l’affaire l’opposant à Kevin Polizzi. Le fondateur et ex-dirigeant de Jaguar Network, devenu Free Pro, était en conflit avec Iliad, son associé majoritaire depuis maintenant six ans. En 2019, contre un chèque de près de 100 millions d’euros, le groupe de Xavier Niel (actionnaire de l’Informé) avait acquis 75 % du capital de cette société marseillaise spécialisée dans les offres aux entreprises. Objectif ? Se faire une place sur un marché dominé par le duopole Orange et SFR en développant une nouvelle Freebox destinée aux TPE (moins de 10 salariés). Un pari audacieux : Iliad évoquait alors une « étape importante (...) en s’appuyant sur les très fortes expertises et complémentarités entre les deux groupes et en s’associant à un entrepreneur reconnu. »

Mais, en 2021, les rapports entre le groupe de Xavier Niel et Kevin Polizzi se dégradent. Ce dernier est révoqué de ses fonctions de directeur général de Jaguar Network pour faute de gestion et faute grave. La procédure a un effet immédiat sur la valeur des parts qu’il conservait. En effet, le contrat prévoyait qu’en cas de départ fautif, une décote de 30 % s’appliquerait automatiquement sur la vente des 25 % qu’il détenait toujours. Inversement, un bonus de 15 % lui serait octroyé en cas de départ « dans de bonnes conditions » (non fautif). La nuance est importante, car elle se chiffre en espèces sonnantes et trébuchantes. Au lieu de toucher 57,7 millions d’euros, Kevin Polizzi a empoché seulement 35,17 millions d’euros. L’ancien dirigeant a alors saisi le tribunal de commerce pour contester les faits qui lui étaient reprochés. L’année dernière, il a gagné en première instance. Iliad a fait appel, mais vient d’être débouté.

Sur les neuf griefs initialement avancés pour justifier la faute grave, Iliad n’en a finalement développé que trois devant la justice : la location à Jaguar d’un appartement détenu par Kevin Polizzi pour un prix supérieur au marché, des travaux dans des bureaux réalisés par un de ses amis à des tarifs surévalués et l’hébergement gratuit d’une société dont le fondateur de Jaguar Network détenait 50 % des parts. Les juges de première instance, tout comme ceux d’appel, ont balayé ces trois arguments, estimant qu’Iliad était parfaitement au courant et dans l’incapacité de prouver une quelconque faute. Ils ont donc condamné l’entreprise à verser 22,6 millions d’euros de plus à Kevin Polizzi.

En revanche, le quadragénaire n’a pas obtenu gain de cause sur sa perte de chance. Il demandait que la valeur de ses titres soit calculée en fonction des résultats 2023 et 2024, et non sur ceux de l’année 2021, comme le prévoyait une clause du contrat. La valorisation de l’ex-Jaguar aurait, dans ce cas, pu atteindre 500 à 600 millions d’euros et ses parts valoir beaucoup plus d’argent. Mais la cour d’appel a jugé que seul Iliad pouvait activer cette clause.

De fait, depuis son rachat en 2019, le chiffre d’affaires de la société fondée par Polizzi a été multiplié par près de trois. Il était de 151,8 millions d’euros l’an dernier, pour un bénéfice net de 12 millions. Désormais dirigée par Denis Planat, elle a lancé en 2024 une offre de location de téléphones, baptisée Loc+ puis en début d’année une nouvelle Freebox Pro incluant des services de cybersécurité.

Aujourd’hui, Kevin Polizzi continue de présider Unitel Group, basé au Luxembourg, un opérateur présent dans l’IA, le cloud et la 5G. Son objectif est aussi de créer un campus numérique et d’intelligence artificielle à Marseille sur 35 000 mètres carrés. L’ensemble doit abriter écoles, espaces de coworking, centres d’appels, restaurants, jardins paysagés... Baptisé Theodora, les travaux doivent commencer cette année et se terminer fin 2028.

Contactés, Iliad et Kevin Polizzi n’ont pas souhaité faire de commentaire et n’ont pas voulu indiquer s’ils allaient se pourvoir en cassation.

For aspiring AI players like Oracle, much rides on debt and hope

In the initial years of the AI boom, comparisons to the dot-com bubble didn’t make much sense. Three years in, growing levels of debt are making them ring a little truer.

Early on, wealthy tech companies were opening their wallets to out-joust each other for leadership in artificial intelligence. They were spending cash generated largely from advertising and cloud-computing businesses. There was no debt-fueled splurge on computing and networking infrastructure like the one that inflated the bubble 2½ decades ago.

While big tech companies are still at AI’s forefront and are in solid financial shape, a crop of more highly leveraged companies is ushering in an era that could change the complexion of the boom.

A few smaller companies—most prominently CoreWeave CRWV -4.99%decrease; red down pointing triangle—have been relying on creative financing to vault themselves to the AI forefront for a while. More recently, though, the ambitions of companies such as OpenAI are poised to take leverage and mega contracts to a whole new level. OpenAI is laying the groundwork for a network of data centers that will cost at least $1 trillion over the next few years. As part of its push, the company signed a $300 billion, five-year contract this month under which Oracle ORCL -2.70%decrease; red down pointing triangle is to set up AI computing infrastructure and lease it to OpenAI.

To make good on its end of the contract, Oracle has to spend on that infrastructure before it gets paid in full by OpenAI—which means a lot of borrowing. Analysts at KeyBanc Capital Markets estimated in a recent note that Oracle would have to borrow $25 billion a year over the next four years.

And Oracle is already highly leveraged. The company had long-term debt of about $82 billion at the end of August, and its debt-to-equity ratio was about 450%. By contrast, Google-parent Alphabet’s ratio was 11.5% in its latest quarter, and Microsoft’s was about 33%.

Oracle and other less-well-heeled AI aspirants such as CoreWeave have few options other than to borrow if they want to play in the big leagues. Nebius Group NBIS -0.22%decrease; red down pointing triangle, another Nasdaq-listed AI cloud company like CoreWeave, reached a $19.4 billion deal in September to supply Microsoft with AI computing services and said it would fund the required capital spending through a combination of its cash flow and debt secured against the contract.

Investors so far haven’t been too concerned: Oracle’s shares shot up after the company revealed a huge expansion of projected revenue owing to its OpenAI deal, even though it will burn through cash for years to fund it. CoreWeave’s shares have more than tripled since the company listed in March, while Nebius rose nearly 50% after news of its Microsoft deal.

But there is reason for skepticism about these companies’ ability to fulfill their contracts and repay their debts. Numerous recent studies have found AI isn’t gaining traction as quickly as its backers suggest: Only 3% of consumers are paying for it, according to one study. Projections of spending on AI data centers reaching trillions of dollars a year within the next few years seem highly optimistic.

Despite the hype around the company, OpenAI’s position looks tenuous. It would need to grow to more than $300 billion of annual revenue in 2030 to justify the spending envisioned in the Oracle contract, D.A. Davidson analyst Gil Luria estimates—a big rise from the company’s current run rate of about $12 billion. OpenAI has backing from SoftBank and Nvidia, which is pledging to invest as much as $100 billion as the build-out proceeds. That is big, but far from sufficient.

“A vast majority of Oracle’s data center capacity is now promised to one customer, OpenAI, who itself does not have the capital to afford its many obligations,” Luria said.

Oracle might be able to reduce its risk by proceeding with spending only as it recognizes revenue from OpenAI. But Moody’s cited “significant” risks in a note this month, pointing to the enormous cost of buying equipment and securing land and electricity. “Whether these will be financed through traditional debt, leases or highly engineered financing vehicles, the overall growth in balance sheet obligations will also be extremely large,” it said. Moody’s in July gave Oracle’s credit rating a negative outlook.

There is a decent chance that it all works out. Oracle might manage its contracts and debt adeptly, as it has done in the past. CoreWeave, Nebius and other players might also usher in a wave of financial innovation that spurs AI’s growth.

But it is at least equally likely that many of today’s massive contracts get postponed or renegotiated because end demand for AI services doesn’t grow in line with the infrastructure build-out. Contracts could be transferred, too, lawyers say: If OpenAI falters, Oracle could lease its infrastructure to another more stable company, assuming the deal allows for that.

Such a reckoning wouldn’t necessarily be a death knell for Oracle and its leveraged peers. But it would be a formidable test for an emerging financial model for AI—one that looks bubblier by the day.

Military leaders are urging defense contractors to increase assembly of 12 critical weapons

The Pentagon, alarmed at the low weapons stockpiles the U.S. would have on hand for a potential future conflict with China, is urging its missile suppliers to double or even quadruple production rates on a breakneck schedule.

The push to speed production of the critical weapons in the highest demand has played out through a series of high-level meetings between Pentagon leaders and senior representatives from several U.S. missile makers, according to people familiar with the matter. Deputy Defense Secretary Steve Feinberg is taking an unusually hands-on role in the effort, called the Munitions Acceleration Council, and calls some company executives weekly to discuss it, some of the people said.

The department summoned top missile suppliers to a June roundtable at the Pentagon to kick off the industry effort. The meeting, attended by Defense Secretary Pete Hegseth and Gen. Dan Caine, the chairman of the Joint Chiefs of Staff, drew executives from several weapons makers, new market entrants like Anduril Industries, and a handful of suppliers of important parts like rocket propellant and batteries.

“President Trump and Secretary Hegseth are exploring extraordinary avenues to expand our military might and accelerate the production of munitions,” said Pentagon spokesman Sean Parnell, when asked about the efforts. “This effort has been a collaboration between defense industry leaders and senior Pentagon officials.”

Some people involved in the effort both inside and outside of the government worry that the government’s targets aren’t realistic. Individual missiles can take two years to fully assemble. It can take several months and hundreds of millions of dollars to test and qualify weapons from new suppliers as safe and reliable enough for U.S. service members to use.

There are also questions about the money needed to accelerate production. The Trump administration’s Big, Beautiful Bill, signed in July, provided an additional $25 billion in five-year munitions funding, but analysts say that hitting the Pentagon’s aggressive targets would cost tens of billions more.

“Companies don’t build these things on spec,” said Tom Karako, a munitions expert at the Center for Strategic and International Studies. “You wait for the government to put them on contract. There needs to be an expression of support with money. It can’t just be words.”

Defense contractors like Lockheed Martin and Raytheon say they have responded by adding workers, widening factory floors and growing spare-parts inventories to prepare for a potential demand surge. But some suppliers have struggled to hit the new targets and are wary of splurging on orders that the government has yet to fund.

Christopher Calio, the chairman and chief executive officer of Raytheon parent RTX, one of the military’s largest munitions producers, said in a July 3 letter to the Pentagon that it was ready to work with the Defense Department to increase production, but cautioned that the company would need additional money and commitments from the Pentagon to buy more munitions.

“Signaling the demand strength of these critical munitions to the supply base with Program of Record extensions…and funding to support is required,” he wrote in the letter, which was reviewed by The Wall Street Journal.

Military officials have fretted about the U.S. ability to ramp up weapons production since Russia’s 2022 invasion of Ukraine. The Biden administration launched an effort to raise munitions production rates and smooth out supply-chain kinks in 2023.

“The current conflict in Ukraine has been a wake-up call,” then-Undersecretary of Defense Bill LaPlante said at the time. “We’ve allowed production lines to go cold, watched as parts became obsolete and seen sub-tier suppliers consolidate or go out of business entirely.”

New missile orders have since failed to keep up with the soaring use of expensive interceptors, including the Patriot, to defend Ukraine against intensifying Russian bombardment. U.S. officials want more of those interceptor missiles on hand to protect bases and allies around the Pacific region.

By June, the Trump administration had set even more aggressive production goals. Then the U.S. fired hundreds of high-end missiles during the 12-day conflict between Israel and Iran, further depleting its missile arsenal.

The new acceleration council is focused on 12 weapons that the Pentagon wants on hand for a potential conflict with China, some of the people said. The list includes Patriot interceptors, Long Range Anti-Ship Missiles, the Standard Missile-6, Precision Strike Missiles and Joint Air-Surface Standoff Missiles. Patriot is a particular priority because Lockheed has struggled to keep pace with surging global demand.

An early request for information asked weapons makers at the June roundtable to detail how they could increase production to 2.5 times current volumes through steps taken over the following six, 18 and 24 months, according to documents reviewed by the Journal. The military also asked suppliers to describe how they might attract new private capital and potentially license their technology to third-party manufacturers.

The Army in September awarded Lockheed almost $10 billion to make nearly 2,000 PAC-3 missiles from fiscal year 2024 to 2026. The Pentagon wants suppliers to eventually pump out that same number of Patriots each year—nearly four times the current production rate, according to some of the people familiar with the matter.

A Lockheed spokeswoman said the company is exploring more investments in Patriot missile production and expects to deliver above its stated capacity for the next several years. An RTX spokesman declined to comment.

The effort is also mapping supply chains down multiple tiers to find areas for potential improvement and looking for second sources where single suppliers create bottlenecks. For example, the Pentagon is calling for more production of a Boeing-made seeker nested in the missile’s nose, which has become a chokepoint for Patriot production.

Boeing rushed this summer to calculate how big an order of the seekers it could fulfill and recently finished a 35,000-square-foot expansion project at its factory, which is still being outfitted with new assembly equipment.

A Boeing spokeswoman said that monthly seeker deliveries have hit new records and that the company plans to further boost production.

Some suppliers say they are willing to put capital at risk before contracts are in hand. A Northrop Grumman spokeswoman said the missile supplier “invested ahead of the need with more than $1 billion across solid rocket motor production facilities,” with plans to nearly double output over the next four years.

The Pentagon will soon be taking more steps to increase production, said Daniel Driscoll, the Army secretary, earlier this month. The department, he said, is planning “massively substantive changes to how we buy our stuff.”

Rahm Emanuel, Weighing Presidential Bid, Navigates a Democratic Party Moving Left

Party long-timer takes a stage in Iowa to test political waters, leaving behind past criticism of Democrats

Rahm Emanuel, former congressman and Chicago mayor, is signaling a potential 2028 presidential run, making high-profile appearances in Iowa.

Emanuel’s centrist message may clash with the Democratic Party’s progressive base, which is drawn to figures like Alexandria Ocasio-Cortez.

Despite Iowa losing its leadoff caucus status, potential 2028 Democratic candidates continue to visit the state, eyeing its political infrastructure.

DES MOINES, Iowa—Rahm Emanuel has plenty of government experience to tout as he appears increasingly serious about running for president: former Democratic congressman, White House chief of staff, Chicago mayor and diplomat.

But his centrist message clashes with an insurgent progressive base mesmerized by figures such as Rep. Alexandria Ocasio-Cortez (D., N.Y.) and Zohran Mamdani, the self-described democratic socialist favored in New York City’s November mayoral election.

So it was instructive to see Emanuel surrounded over the weekend by the Democratic base in Iowa where he headlined an annual party fish fry fundraiser in the state’s largest county. While he wasn’t technically campaigning, it was the first time the famously combative Emanuel had made a high-profile retail political appearance on his own behalf for the better part of a decade.

It felt at times a bit like watching a professional athlete return to the arena after an extended absence. The game has changed significantly since the 65-year-old was last a candidate in 2018, with the explosion of social media and viral videos in politics.

Emanuel made frequent mentions of political and policy wins he helped presidents Bill Clinton and Barack Obama achieve, as well as his own in Chicago. But gone were his recent criticisms of his party’s brand as “toxic” and “weak and woke.”

His visit followed those by other potential 2028 Democratic presidential candidates in the past 16 months, including Kentucky Gov. Andy Beshear, Illinois Gov. JB Pritzker, Minnesota Gov. Tim Walz and former U.S. Secretary of Transportation Pete Buttigieg.

Some other potential candidates include former Vice President Kamala Harris, who told The Wall Street Journal she still sees herself as a party leader, and California Gov. Gavin Newsom, who has adapted a combative online presence to take on Trump. Carving out a distinct lane will be vital in what is expected to be a large field.

There were reminders that Emanuel isn’t a fresh face. Sean Bagniewski, a state representative who hosted the fundraiser in his front yard, told the audience that he once saw Emanuel and Clinton pass through the Des Moines airport together when he was in the fifth grade.

The seriousness of Emanuel’s ambitions was obvious throughout his two-day visit. He deployed a small advance team to make preparations ahead of his stops and a professional video camera operator filmed him. He attended a high-school football game, visited a business incubator in a low-income neighborhood, and met with teachers, families and union workers.

Emanuel seemed on a mission to shake hands with all of the roughly 400 fish fry attendees. When one woman asked if he is running for president, he replied: “I’m thinking about it.”

On stage, there was self-deprecating humor, a brief impersonation of Clinton and a pledge to work on his empathy. Still, the take-no-prisoners style that earned Emanuel the nickname “Rahm-bo” was never far away: “Washington needs a two by four, and someone who knows how to swing it.”

He criticized the U.S. for not doing more to help children and parents, praised Australia’s planned ban of social media for those under 16, and reflected on time spent practicing ballet in high school.

“I had an after school,” he said, referring to extracurricular activities. “I learned discipline,” he said. “We have to give this to our kids.”

After a mother cried as she spoke about caring for an adult daughter with Down syndrome, Emanuel at one point came close to responding with Clinton’s famous “I feel your pain” line. Instead, Emanuel offered, “I feel your anguish.”

John Hallman, a state government worker from Des Moines who attended the fundraiser, said after Emanuel spoke that there is “no doubt in my mind he’s running.”

Hallman saw enough to put Emanuel high on his list for 2028. “I want a candidate who has fire in their belly and can handle themselves on a debate stage,” he said.

The attention on Iowa comes despite the Democratic National Committee removing the state’s leadoff slot in the presidential nomination process for the 2024 election. Iowa Democrats hope to secure an early spot on the 2028 calendar, with some even threatening to go rogue to host the first balloting, even if unsanctioned by the party.

Republicans are expected to leave Iowa, a state that has the political infrastructure and tradition to host candidates, in the leadoff position for 2028.

Emanuel and prospective 2028 candidates have talked about the state’s importance in the 2026 midterms. Iowa may have competitive races for open seats for governor and Senate, along with two competitive House races.

Tom Miller, a former Iowa attorney general who was one of the first elected officials outside of Illinois to endorse Obama in 2007, said he is most interested in Emanuel, Beshear and Pennsylvania Gov. Josh Shapiro.

“If we are going to win, I think we need another Clinton,” Miller said. “We need people who can reach the middle and focus on economic issues.”