Capello Closes Merchants’ Gate Hedge Fund to Focus on Family (2)
2014-12-29 18:56:47.407 GMT
(Updates with stocks’ performance in sixth paragraph.)
By Simone Foxman and Nathaniel Baker
(Bloomberg) -- Merchants’ Gate Capital, started in 2007 by
former Ospraie Management senior analyst Jason Capello, is
shuttering as hedge funds close at the fastest pace since 2009.
The New York-based firm is liquidating the balance of its
holdings before the end of the year and will return at least 90
percent of investor money by Jan. 31, according to a letter sent
to its clients.
“This was a very difficult decision for me, and one that I
have not undertaken lightly,” Capello, 42, wrote in the letter.
“After almost 20 years in the financial services industry, two-
thirds of that as an investment manager, I am ready to take a
break, focus on my young family and take time to figure out the
next chapter.”
Merchants’ Gate managed a peak of $2.3 billion in assets in
2012, according to a person with knowledge of the matter who
asked not to be identified because the information is private.
It specialized in bets on and against stocks in the energy,
transportation, retail, and business services industries.
Assets declined to $1.1 billion at the end of November even
as its main fund gained 6.7 percent this year, according to the
person.
Energy Stocks
The firm held about $908 million in U.S. equities as of
Sept. 30, according to data compiled by Bloomberg. About 34
percent of those holdings were in energy-related stocks with its
largest publicly-disclosed position Williams Cos. Shares of the
pipeline company have declined 18 percent since the end of the
third quarter. Merchants’ Gate also held shares in C.trip.com
International, which has fallen 21 percent since Sept. 30, and
Green Plains Inc., down 33 percent.
Steve Bruce, a spokesman for the firm at ASC Advisors,
declined to comment on the closing.
Hedge funds have been shutting at the fastest pace since
the financial crisis as returns have lagged behind benchmarks
and investors have gravitated to a small group of established
managers. The average hedge fund has gained 1.6 percent in 2014
through November, according to Bloomberg data. The Standard &
Poor’s 500 Index surged nearly 14 percent, including reinvested
dividends. In the first half of the year, 461 funds closed,
Chicago-based Hedge Fund Research Inc. said.
For Related News and Information:
Hedge Funds Shut at Fastest Pace Since 2009 on Poor Returns
Anderson Said to Shutter Macro Fund After Less Than Three Years
To contact the reporter on this story:
Simone Foxman in New York at +1-212-617-2052 or
sfoxman4@bloomberg.net
To contact the editors responsible for this story:
Charles W. Stevens at +1-212-617-2652 or
cstevens@bloomberg.net;
Christian Baumgaertel at +1-617-210-4624 or
cbaumgaertel@bloomberg.net
Pierre Paulden, Mary Romano
2014-12-29 18:56:47.407 GMT
(Updates with stocks’ performance in sixth paragraph.)
By Simone Foxman and Nathaniel Baker
(Bloomberg) -- Merchants’ Gate Capital, started in 2007 by
former Ospraie Management senior analyst Jason Capello, is
shuttering as hedge funds close at the fastest pace since 2009.
The New York-based firm is liquidating the balance of its
holdings before the end of the year and will return at least 90
percent of investor money by Jan. 31, according to a letter sent
to its clients.
“This was a very difficult decision for me, and one that I
have not undertaken lightly,” Capello, 42, wrote in the letter.
“After almost 20 years in the financial services industry, two-
thirds of that as an investment manager, I am ready to take a
break, focus on my young family and take time to figure out the
next chapter.”
Merchants’ Gate managed a peak of $2.3 billion in assets in
2012, according to a person with knowledge of the matter who
asked not to be identified because the information is private.
It specialized in bets on and against stocks in the energy,
transportation, retail, and business services industries.
Assets declined to $1.1 billion at the end of November even
as its main fund gained 6.7 percent this year, according to the
person.
Energy Stocks
The firm held about $908 million in U.S. equities as of
Sept. 30, according to data compiled by Bloomberg. About 34
percent of those holdings were in energy-related stocks with its
largest publicly-disclosed position Williams Cos. Shares of the
pipeline company have declined 18 percent since the end of the
third quarter. Merchants’ Gate also held shares in C.trip.com
International, which has fallen 21 percent since Sept. 30, and
Green Plains Inc., down 33 percent.
Steve Bruce, a spokesman for the firm at ASC Advisors,
declined to comment on the closing.
Hedge funds have been shutting at the fastest pace since
the financial crisis as returns have lagged behind benchmarks
and investors have gravitated to a small group of established
managers. The average hedge fund has gained 1.6 percent in 2014
through November, according to Bloomberg data. The Standard &
Poor’s 500 Index surged nearly 14 percent, including reinvested
dividends. In the first half of the year, 461 funds closed,
Chicago-based Hedge Fund Research Inc. said.
For Related News and Information:
Hedge Funds Shut at Fastest Pace Since 2009 on Poor Returns
Anderson Said to Shutter Macro Fund After Less Than Three Years
To contact the reporter on this story:
Simone Foxman in New York at +1-212-617-2052 or
sfoxman4@bloomberg.net
To contact the editors responsible for this story:
Charles W. Stevens at +1-212-617-2652 or
cstevens@bloomberg.net;
Christian Baumgaertel at +1-617-210-4624 or
cbaumgaertel@bloomberg.net
Pierre Paulden, Mary Romano