Another hedge fund is closing down and converting to a family office. But this time, the manager is leaving on a high note.
Tiger Cub Robert Bishop told clients in a letter on Wednesday that he is shutting down Impala Asset Management effective June 30.
“I recently turned 65, and [I’ve] spent 36 years in the investment industry, half of them with Impala,” Bishop told clients. In the letter, Bishop hinted that he’d been thinking of closing down for a while, noting that in mid-2021 the firm decided to back off from marketing its funds “and just focus on markets and individual names.”
Bishop is definitely going out on top. Since its inception on April 1, 2004, Impala’s flagship Impala fund has generated a 1,126.5 percent return, which works out to a 14.8 percent compounded annualized return. This compares with 427.4 percent for the S&P 500, or a 9.6 percent compounded annualized return.
A “typical” Impala investor during that time enjoyed a roughly 647 percent gain, or 11.7 percent annualized gain, according to the letter. This year, through May, the main Impala Fund was up 11 percent, while Impala Resource Fund was up 22 percent. Last year, Impala Fund gained 35.36 percent while Impala Resource Fund surged 58.4 percent.
“Any prospective employee who asked me about the hedge fund industry, I always gave the same observation — at a hedge fund, the highs are higher and the lows are lower,” Bishop wrote. “At Impala, we have been fortunate to have the highs be a bit higher and to have survived the lows.”
Impala is currently managing between $2.3 billion and $2.5 billion.
Bishop is a Tiger Cub because he previously served as a managing director at Julian Robertson Jr.’s Tiger Management. He then worked for Lee Ainslie III’s Maverick Capital.
Unlike most Tiger descendants, Impala eschews the high-flying tech, internet, telecom, and consumer stocks. Instead, it invests primarily in cyclical companies in basic industries such as consumer, energy, industrials, and materials.
II earlier reported that Impala believed the pandemic had triggered the beginning of a major value cycle in the markets. “Our assessment of markets is that when there is a shift to value or growth, the shifts often last five to 10 years,” Impala stated in its first-quarter 2021 letter, obtained earlier by II. “We are leaving the 2007-20 era, where growth stocks outperformed value at unprecedented levels.”
There has been much speculation about which hedge fund would be the next one to close, given the huge losses suffered by a number of high-profile and lesser known funds this year and the recent announcement that Gabe Plotkin is shutting down Melvin Capital Management.
However, it’s not unusual for a hedge fund to close after a strong year.
Institutional Investor recently noted that Tiger Cub Robert Karr shut down Joho Capital in January 2014 after 17 years, having just posted a 30.3 percent gain the prior year. “This is something I have been considering for the past few years, with the hope that when we ended, it would be on a positive note and we would be able to reward our investors for their loyalty and our colleagues for their very hard work,” he told clients in a letter obtained by II at the time.
