After A Disastrous Year For Hedge Funds, Here Are The Biggest Casualties

Closing the book on 2018 couldn't come fast enough for the hedge fund industry, which has had a truly abysmal year, and which saw some quite notable casualties in the past 12 months.

This morning we reported the latest woes to beset Swiss multi-billion fund manager GAM Holdings, which after a series of internal scandals and underperformance, was hit with a record 4.2 billion Swiss francs in outflows in just the past two months, while quant fund losses and asset write-downs hammered total AUM which tumbled by over 24 billion Swiss francs, from CHF 84.4BN as of Jun 30 to just CHF 60.8BN as of Nov 30.

The good news is that while GAM may be suffering from a terminal redemption flight, it is still around to fight another day which is more than some other hedge funds can say.

Overnight, Bloomberg also reported that Philippe Jabre became the latest hedge fund manager to throw in the towel, when he announced he was returning money to investors after an "especially challenging" year, adding to the growing list of hedge-fund veterans giving up on an industry where money-making opportunities have dwindled as a result of the central bank take over of "markets.".

The Geneva-based Jabre Capital Partners SA is returning client money in the three funds personally managed by Jabre, said Mark Cecil, one of the firm’s founding partners. The remaining two funds, one focused on emerging markets and the other on European credit, will keep operating with outside money, he said. Jabre, the founder and chief investment officer of his namesake firm, is selling positions in a “disciplined manner” and intends to return most of the proceeds by February, he wrote in an investor newsletter dated Dec. 12 and obtained by Bloomberg News. Jabre Capital managed about $1.2 billion of assets as of April with more than 40 employees.

“In previous periods, weakness created opportunities but as we survey the outlook for 2019, we are concerned that we don’t see those opportunities,” Jabre wrote in the letter. “Both the political and economic outlooks remain confused and without clear direction.”

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