One year ago
»»FrontPoint Partners, Morgan Stanley’s then-$7 billion hedge-fund unit, planned to launch five new strategies within its $2.6 billion FrontPoint Multistrategy Fund, including U.S. event driven, global statistical arbitrage, direct lending, Australian long/short and emerging markets macro strategies. The fund also cut its relative-value, global-emerging markets and global equity long/short strategies due to negative performance.
In October 2010, Morgan Stanley and FrontPoint agreed to spin-off FrontPoint as a standalone firm. These plans were put on hold just two weeks later when the U.S. Securities and Exchange Commission began an insider-trading probe, with prosecutors accusing a French doctor of illegally giving a FrontPoint manager confidential information about a clinical drug trial. Although the firm has not been charged with wrongdoing, FrontPoint dismissed the portfolio manager in question, Joseph F. “Chip” Skowron III, along with the rest of its healthcare investment team. Skowron denies any involvement in insider trading. Facing $3 billion in redemptions, FrontPoint liquidated Skowron’s healthcare funds. The firm now manages $4.5 billion. FrontPoint declined to comment.
In January, star manager Steve Eisman, who oversees $1.2 billion for FrontPoint, said he might leave FrontPoint to start his own hedge fund. Eisman became well known for his bets against subprime mortgages in 2007.
»»Well-known marketer Rachel Minard left San Francisco fund of funds firm Cogo Wolf Asset Management. Minard’s stay at the firm was short-lived. She joined in July 2008 in an effort to secure more institutional capital, but asset-raising proved difficult following losses of 30.25% in 2008 and 0.37% in 2009. Recent performance was not available. The firm did not return a call seeking comment.
Minard re-surfaced a few months later, in May 2010 when she joined the $3.5 billion fund of funds Optima Fund Management as a partner and managing director. After falling 21.95% in 2008, Optima’s flagship fund was up 7.55% in 2009 and 4.82% in 2010.
Five years ago
»»As part of its rebranding from Credit Suisse First Boston, Credit Suisse merged its New York funds of funds with its Zurich funds of funds. Under Jim Vos’s leadership, the New York funds of funds division was more institutional, with its clients consisting primarily of pensions and insurance companies. Zurich had catered to the wealthy.
Vos left the bank in April 2006, as did Boris Arabadjiev, who headed the New York group’s risk management efforts. Vos went on to found consulting firm Aksia. He quickly expanded its client-base and the firm later earned plaudits for warning clients against investing with Bernard Madoff.
Steve Smith, who oversaw single managers, funds of funds, and index platforms in London, resigned in May 2009. One month later, Ravi Singh, a Goldman Sachs veteran, came out of retirement to replace Smith. Singh remains in this role.
Arabadjiev, who acted as a consultant for Credit Suisse from the time of his departure in April 2006, was re-hired in February 2007 as chief operating officer and managing director. Six months later, he was made head of the Swiss bank’s funds of funds business, a title which he held until early 2011. He left on February 1, 2011. Andrew Stewart, head of the liquid alternatives division, which handles hedge funds and funds of funds, took over Arabadjiev’s role. Stewart joined in November 2010 from Man Investments. Credit Suisse’s funds of funds business oversees about $10 billion, down from the $13 billion it managed in February 2010.
