Louis Bacon to shut Moore Capital hedge fund
Closure after three decades follows years of weakened returns
Louis Bacon, the veteran hedge fund manager and founder of Moore Capital Management, is planning to shut his firm and return capital to investors after three decades, according to two people familiar with the situation, in what will be one of the industry’s most high profile closures to date.
The decision follows years of diminished performance at Moore’s hedge funds, which trade stocks, bonds, currencies and other financial instruments. Moore Capital declined to comment.
Raised in North Carolina, Mr Bacon began his trading career at Commodities Corporation in the 80s, where he rubbed elbows with the future hedge fund billionaires Bruce Kovner and Paul Tudor Jones.
Mr Bacon is viewed by peers as one of the most successful traders of his generation, known for his ability to shift between positions based on macroeconomic judgments. But he has also struggled to match his historical record since the 2008 financial crisis, a period marked by persistently low interest rates that has frustrated many macro managers.
Last year a Moore fund managed by Mr Bacon declined by almost 6 per cent following two spikes in market volatility that wrong footed several hedge funds. Another Moore fund overseen by teams of portfolio managers fell 3.3 per cent for the year, according to performance information sent to investors.
Mr Bacon gained early notoriety for making gains of 86 per cent in 1990 after betting against Japanese markets and 45 per cent in 1992 when the European Exchange Rate Mechanism collapsed. Through last year, Moore had made $18.3bn for investors since the firm’s inception, making it the 15th most profitable hedge fund of all time, according to data published by LCH Investments.
Mr Bacon joins other hedge fund managers such as Leon Cooperman and Michael Platt who have shunned outside investors in recent years.
Moore’s assets under management have declined by billions in the past decade to $8.9bn at the end of last year, according to regulatory filings.
Before deciding to return capital, Mr Bacon had been pitching investors on a fund managed by one of his top-performing traders, Joeri Jacobs, people briefed on the matter said. It was unclear whether the fund would now spin out independently.
Mr Bacon, whose net worth Forbes estimates at $1.5bn, has given money largely to environmental causes. In 2012, he donated close to 167,000 acres of land on his Colorado ranch to the US Fish and Wildlife Service for conservation purposes, marking the largest ever easement in the US