http://www.marketwatch.com/story/pallotta-to-wind-down-raptor-global-funds
Jun 2, 2009, 5:56 p.m. EST
Pallotta to wind down Raptor Global Funds
Former Tudor trader suspends redemptions, plans comeback
By Alistair Barr, MarketWatch
SAN FRANCISCO (MarketWatch) -- James Pallotta told investors Tuesday that he's shutting down the Raptor Global Funds, becoming the latest hedge fund veteran to step back from the industry.
Pallotta, chairman of Raptor Capital Management, has suspended redemptions from the funds and stopped day-to-day investing for a few months, according to a letter Raptor sent to investors on Tuesday, a copy of which was obtained by MarketWatch. A spokesman for the firm declined to comment.
However, the former Tudor Investment Corp. equities trader is planning a comeback soon, possibly later this year. With that in mind, Pallotta is keeping his management company up and running, he said in the letter.
"The decision to wind down the Funds and to begin returning capital in early July should be seen in context," he wrote. "I am no less passionate about investing and trading today than I was 22 years ago. In fact, quite the contrary is true."
"Once the process of returning capital is smoothly underway, I intend to step back from day-to-day investing for a few months to spend valuable time crafting an optimal investment strategy in order to capitalize fully on the next several years' developing investment opportunity set," Pallotta added.
After record losses and massive investor redemptions last year, the hedge fund industry remains under pressure, despite a recovery in performance so far in 2009. Last week, Pequot Capital, a hedge fund firm run by another industry veteran Arthur Samberg, said it's shutting down in the midst of a government investigation. See full story.
Pallotta has been a leading equities hedge fund manager for many years. He began working at Paul Tudor Jones' Tudor hedge fund firm in 1993 and Raptor grew within that group.
The Raptor Global funds returned 13.85% a year on average from Oct. 1, 1993 to the end of May this year, after fees. That compares to average annualized returns of 6.53% for the Standard & Poor's 500 index during the same period, Pallotta said in his Tuesday letter to investors.
At their peak in 2007, Raptor Global funds oversaw roughly $9 billion. However, Pallotta lost money last year and some investors redeemed. As 2009 began, Pallotta separated his business from Tudor. The funds currently manage about $1 billion. See related story.
However, Pallotta remained cautious this year, keeping cash levels high at Raptor. The funds are roughly "flat" this year, through the end of May, he noted in his letter to investors.
Jun 2, 2009, 5:56 p.m. EST
Pallotta to wind down Raptor Global Funds
Former Tudor trader suspends redemptions, plans comeback
By Alistair Barr, MarketWatch
SAN FRANCISCO (MarketWatch) -- James Pallotta told investors Tuesday that he's shutting down the Raptor Global Funds, becoming the latest hedge fund veteran to step back from the industry.
Pallotta, chairman of Raptor Capital Management, has suspended redemptions from the funds and stopped day-to-day investing for a few months, according to a letter Raptor sent to investors on Tuesday, a copy of which was obtained by MarketWatch. A spokesman for the firm declined to comment.
However, the former Tudor Investment Corp. equities trader is planning a comeback soon, possibly later this year. With that in mind, Pallotta is keeping his management company up and running, he said in the letter.
"The decision to wind down the Funds and to begin returning capital in early July should be seen in context," he wrote. "I am no less passionate about investing and trading today than I was 22 years ago. In fact, quite the contrary is true."
"Once the process of returning capital is smoothly underway, I intend to step back from day-to-day investing for a few months to spend valuable time crafting an optimal investment strategy in order to capitalize fully on the next several years' developing investment opportunity set," Pallotta added.
After record losses and massive investor redemptions last year, the hedge fund industry remains under pressure, despite a recovery in performance so far in 2009. Last week, Pequot Capital, a hedge fund firm run by another industry veteran Arthur Samberg, said it's shutting down in the midst of a government investigation. See full story.
Pallotta has been a leading equities hedge fund manager for many years. He began working at Paul Tudor Jones' Tudor hedge fund firm in 1993 and Raptor grew within that group.
The Raptor Global funds returned 13.85% a year on average from Oct. 1, 1993 to the end of May this year, after fees. That compares to average annualized returns of 6.53% for the Standard & Poor's 500 index during the same period, Pallotta said in his Tuesday letter to investors.
At their peak in 2007, Raptor Global funds oversaw roughly $9 billion. However, Pallotta lost money last year and some investors redeemed. As 2009 began, Pallotta separated his business from Tudor. The funds currently manage about $1 billion. See related story.
However, Pallotta remained cautious this year, keeping cash levels high at Raptor. The funds are roughly "flat" this year, through the end of May, he noted in his letter to investors.
