When Jason Karp’s Tourbillon Capital Partners told clients on Monday that it is shutting down its Tourbillon Global Master Fund after six years, it not only marked the latest multi-billion dollar hedge fund firm to shut down.
It is also at least the fifth fund with roots in Steven Cohen’s SAC Capital Advisors — the so-called SAC Pack — to call it quits, and the third this year alone. The news was first reported in The Wall Street Journal.
“We believe we need to be investing solely in areas where we have strong, distinct advantages with the highest odds of success,” Karp reportedly wrote in a letter to investors. “We think TGMF no longer fits that bill.”
This is a humbling moment for Karp, who specialized in long-short equity, with an emphasis on technology, media, and telecommunications (the so-called TMT sector), health care, and consumer stocks.
His fund was down 3.2 percent for the year through September, according to the report. It also lost nearly 14 percent last year and another 9 percent in 2016.
Karp normally maintained a very low net exposure and even felt that net exposure was overstated since Tourbillon aggressively used options to hedge. So it liked to tell investors it had zero net beta.
Karp made headlines several years ago when he told attendees of the Milken Institute Global Conference that he uses a former CIA interrogator to conduct personality tests for prospective hires.
Before launching Tourbillon, Karp was a partner and co-chief investment officer at Carlson Capital, working closely with founder Clint Carlson. Previously, Karp was a portfolio manager of global equities and the director of research at CR Intrinsic Investors, which was part of SAC.
Karp is one of at least five former SAC vets to shut down in the past two years.
In early September Christopher Winham’s Tide Point Capital Management told clients it was closing “due to the majority owner’s personal wishes,” according to Reuters at the time.
Winham was a senior research analyst at SAC Capital from 2002 to 2005. Tide Point was seeded by Tiger Cub Chris Shumway.
As we earlier reported, Tide Point generated double-digit gains in three of its first four full years from 2013 through 2016, according to a firm document acquired earlier by Institutional Investor. It lost 3.45 percent in 2017 after losing 10.2 percent through September of that year, according to a monthly report seen by II. The firm lost 2.29 percent this year through July, the monthly report showed.
Back in April, Sol Kumin’s Folger Hill Asset Management merged with Schonfeld Strategic Advisors, according to Business Insider at the time. Schonfeld was said to be mostly interested in Folger Hill’s Asia fund.
In 2016 Schonfeld invested $500 million in the Folger Hill Asia fund. Kumin became chief strategic officer at Leucadia Asset Management, which backed Folger Hill.
Kumin was formerly head of new business and recruitment at SAC Capital.
Last year Neil Chriss closed Hutchin Hill Capital, a multistrategy firm, after posting three disappointing years. The quant specialist spent four years at SAC, from 2003 through 2007.
And Kingdom Ridge Capital, a small hedge fund firm co-founded in 2007 by Christopher Zepf, closed at the end of 2017 after ten years. He managed a long/short technology portfolio at SAC Capital.
