Employees of Duff Capital Advisors, the nearly stillborn Greenwich, Connecticut–based hedge fund firm launched by Philip Duff, are looking to start over without the firm’s well-known founder.
Duff, a former Tiger Management Corp. chief executive officer and co-founder of FrontPoint Partners, launched Duff Capital to great fanfare in March 2008 after securing $500 million in capital from New York–based private equity firm Lindsay Goldberg. Duff originally said he expected to raise as much as $1.5 billion from institutional investors. But given the tight credit markets, the money didn’t come in, and the firm began to fade, practically from inception.
Now the 20 or so remaining staffers (the firm had about 100 at its height) are in talks with Lindsay Goldberg to take the remaining money and relaunch — under a different name and without Duff — according to people familiar with the plan. Lindsay Goldberg did not respond to requests for comment, but a spokesman for Duff says the manager is still intent on making a go of the firm, of which he is the majority owner. “Phil is considering his options but remains committed,” the spokesman says, adding that Duff’s timing was bad. “No one could have predicted this financial depression and its impact on capital raising.”
In July, Duff Capital Advisors announced the acquisition of North Sound Capital, a Greenwich-based long-short equity fund started by former Tiger analyst Thomas McAuley. But toward the end of 2008, McAuley took it back, according to people familiar with the deal.
For Duff it must feel a little like history repeating itself. In 2006, when he and two partners sold $5.5 billion FrontPoint to Morgan Stanley, it was considered a shrewd transaction. But behind the scenes, people who have talked to FrontPoint employees say there were tensions, particularly between Duff and staff members. Duff, who was not keen on the idea of selling, was eventually frozen out of the negotiations.
