Two Hedge Funds Close Shop

WSJ reports that George Noble and former Tudor superstar Jim Palotta will close their hedge funds, and return cash to investors. Will be interesting if the insane market closing action over the past two days is related to their unwinds.

James Pallotta, who runs the $800 million Raptor fund, has decided to return money to outside clients, people familiar with the matter said.

George Noble, a former mutual-fund manager who controls some $550 million across two funds named Gyrfalcon, intends to refund clients this month. He describes his 2009 performance in a letter to investors Tuesday as "the most professionally disappointing and personally frustrating of my entire career."

Their simultaneous exits show how veteran investors still regard these markets with caution, despite stocks' recent ascent. The decisions could portend similar moves by other fund managers who, burned by losses and facing pressure from clients, opt to shutter, even as the hedge fund industry's returns have improved.

Comments

[doubleguns:]

Maybe they see that the manipulation has started to unwind and are getting out while the getting is good.

Prediction of things to come?

Jun 03 07:54 AM

[deee:]

Could this be what happened to HES yesterday. It took a such a big dip on no news.

Jun 03 08:05 AM

[raytayzmd:]

...gosh, I sure hope poor old Jim doesn't have to sell his shack:

www.boston.com/realest.../

Jun 03 08:52 AM

[LKofScotland:]

perhaps this is like shooting fish in a barrel. can there possibly be any more worthless dollars floating around? soon uncle sam will feel like the "american consumer" he has demanded all the world to become, no?

Jun 03 11:14 AM

[DmytrenkoArtem:]

interesting what they will do now.. heh.. wall street can bit all.. Wall Street have the biggest parametras of risks and rewards ))

Jun 03 11:32 AM

[RiskReturnO...:]

The unwinding of hedge funds is long-term positive, as too much money was chasing macro-trends, and many uncorrelated assets became very correlated in the post-Lehman environment ... return to basic fundamental based / value-oriented investment is healthy for the long term ... but, short-term, we'll have to see the impact on investor psychology and sentiment.

Jun 03 11:45 AM

[Just Say Whoa!:]

Bernie Madoof wept.

Jun 03 12:28 PM

[CPST1:]

Here's a report and the risk the Air France flight was up against last week as they crossed the Atlantic through the "intertropical convergence zone (ITCZ)" or, where storm activity is at its highest.

www.weathergraphics.co.../

Hedge funds should know when to get out (liquidate) and cross lines, when they have so much on the line and yet have so much beyond what they set out to accomplish.

Turning back is always a smart move in aviation. Some storms just can't be crossed.

Jun 03 12:30 PM

[Paul Price:]

Of course they're going to liquidate these huge funds as both are so far below their old 'high water' marks that the managers can't expect to see big incentive fees in the reasonable future.

They can make much more by starting new funds without that 'stagger' so they can rape the investors right away as the market recovers.

Jun 03 12:45 PM

[icepop:]

I read this gentleman's analysis of the AF447 disappearance.

Too bad all investments do not have this degree of insightful risk/reward information.

Solid analysis, Tim.


On Jun 03 12:30 PM CPST1 wrote:

> Here's a report and the risk the Air France flight was up against
> last week as they crossed the Atlantic through the "intertropical
> convergence zone (seekingalpha.com/symbo...)" or, where
> storm activity is at its highest.
>
> www.weathergraphics.co.../
>
> Hedge funds should know when to get out (liquidate) and cross lines,
> when they have so much on the line and yet have so much beyond what
> they set out to accomplish.
>
> Turning back is always a smart move in aviation. Some storms just
> can't be crossed.

Jun 03 03:08 PM

[MrZack888:]

good, hedge fund are the scum of society

Jun 03 04:20 PM

[mkreisel:]

George Noble lost 30% this year, must have been short the market.

Last Friday's sudden surge in the final 10 minutes could be his handiwork.

Jun 03 05:53 PM

[HardwoodFlo...:]

Too bad Ackman doesn't have the same sense of humility.

Jun 03 06:25 PM

[Donald Ingram:]

No surprise -
FACT:
In the preceeding 28 months, 70 financial outfits with over 115 hedge funds have disapeared. Now thats a lot of salad!

Jun 03 08:28 PM

[Donald Ingram:]

Great link - absolutely fascinating. Flying to Europe soon. How safe is safe?


On Jun 03 12:30 PM CPST1 wrote:

> Here's a report and the risk the Air France flight was up against
> last week as they crossed the Atlantic through the "intertropical
> convergence zone (seekingalpha.com/symbo...)" or, where
> storm activity is at its highest.
>
> www.weathergraphics.co.../
>
> Hedge funds should know when to get out (liquidate) and cross lines,
> when they have so much on the line and yet have so much beyond what
> they set out to accomplish.
>
> Turning back is always a smart move in aviation. Some storms just
> can't be crossed.

Jun 03 09:24 PM

[Audio Tactics:]

And the winning answer/comment is...


On Jun 03 12:45 PM Paul Price wrote:

> Of course they're going to liquidate these huge funds as both are
> so far below their old 'high water' marks that the managers can't
> expect to see big incentive fees in the reasonable future.
>
> They can make much more by starting new funds without that 'stagger'
> so they can rape the investors right away as the market recovers.

Jun 04 02:34 AM

[Sanjeev Sharma:]

The closing of investment management companies is no surprise as people running them are usually not selected based on their investment management skills.

In fact, wall street is yet to come up with an examination process to test such a skill..

The hiring in hedge funds and private equity shops is done from investment banking world, where the key to success is sales skills.

>No surprise -
>FACT:
>In the preceeding 28 months, 70 financial outfits >with over 115 hedge funds have disapeared. Now >thats a lot of salad!

Jun 04 04:06 AM