| Kalir: Out of sync |
They say there was no falling out. And no loss of respect for each other. But the team of Erez Kalir and Craig Perry startled observers last month when they announced plans to liquidate their $674 million Sabretooth Capital Management, the macro hedge fund firm seeded by Julian Robertson Jr.’s Tiger Management Corp. in 2009. “We have taken the painful decision to dissolve the fund,” Kalir and Perry wrote in an e-mail to investors. “We are deeply grateful for the opportunity that each of you has given us to be your partner. We are gravely disappointed to leave you with this result on the back of a down year, but trust that by returning capital now, we are honoring the firm’s founding principle of stewardship in the best way we can.”
New York–based Sabretooth managed $674 million as of January 1 and had received redemption requests for only between 10 and 15 percent of capital when the decision to close was made in mid-April. And due to a 25 percent quarterly gate, most of the firm’s assets were locked in until mid-2013. Still, the partnership between Kalir and Perry was no longer viable. “The two of us have really struggled to get in sync and row the firm in unison together over the last six months,” says co-portfolio manager Kalir. “It’s a complex and novel market right now, and we were having trouble agreeing on how to navigate it.”
Kalir declines to give specifics on what those disagreements were but generally says that he and Perry had different opinions about how to size and time various investments, and how much and what kind of insurance to own to protect the whole portfolio.
The abrupt liquidation surprised investors. “It’s disheartening. They are really stand-up guys and seemed like a great team,” says one client. “Sometimes smart people just get the bet wrong.”
