Nov. 3 (Bloomberg) -- Moore Capital Management LLC, founded by Louis Bacon almost two decades ago, tapped Greg Coffey, formerly GLG Partners Inc.'s top-performing money manager, to be co-chief investment officer of Moore's European business.

Coffey, 37, will join London-based Moore Europe Capital Management LLP with a 12-person team. Eric Dannheim, a senior member of that team, will become chief operating officer of Moore Europe. Coffey had originally planned to set up his own shop after leaving London-based GLG.

``Greg Coffey is one of the most impressive trading professionals operating anywhere in the world today,'' Bacon said in a statement. ``I have known Greg for a number of years and we have similar views with respect to markets and investment decisions.''

Bacon, 52, has been the sole chief investment officer for his New York-based firm since starting it in 1990. A so-called macro investor -- chasing large economic trends by trading stocks, bonds, currencies and commodities -- he's been adding employees and attracting capital this year even as other funds have been firing personnel and facing client withdrawals in the worst financial crisis since the Great Depression.

Shawn Pattison, a spokesman for Moore, declined to comment.

In the past 12 months, Moore's assets under management have climbed to $20 billion from $15 billion, due to returns and about $1 billion in new investments. The firm's main Moore Global Investment Fund has declined about 6.3 percent this year through Oct. 23 and has posted an average annual return of about 22 percent, after fees, since inception.

Coffey's Funds

At Moore, Coffey is slated to manage two funds with internal capital. The first is an emerging-market stock fund resembling one he managed at GLG that climbed 6.7 percent this year through Sept. 30.

Coffey will also manage an emerging-currency and fixed- income fund. A similar fund at GLG jumped 24.5 percent in the first nine months of the year. He'll also manage part of the flagship macro fund.

Hedge funds, on average, have dropped 19.6 percent this year through Oct. 30, according to Chicago-based Hedge Fund Research Inc., their worst performance since the firm began collecting data in 1990.

U.S. funds may lose 15 percent of assets to withdrawals while their European rivals may shed as much as 25 percent, Huw van Steenis, a Morgan Stanley analyst in London, recently told clients. The hedge fund industry, which managed about $1.7 trillion as of the end of September, may shrink to $1.3 trillion by year-end, van Steenis said.

Regulation, Losses

Coffey ran more than a quarter of GLG's $24 billion in hedge-fund assets when he announced his resignation from the London-based firm in April. He stayed on to manage three funds until October.

Increased demands by regulators and investors for compliance controls and infrastructure -- along with big losses at many hedge funds -- have combined to make this the slowest year for hedge fund start-ups since 2001, according to consultants who help set up funds.

``It's getting harder and harder for new entrants, the big are going to get bigger,'' said Jerome Lussan, who runs Laven Partners LLP, a London-based hedge investment management consultant.

Redemption Demands

At GLG, Coffey's largest fund was the Emerging Markets Fund, which climbed 51 percent in 2007 and 62 percent in 2006. The fund has dropped about 30 percent this year through Sept. 30. GLG said in August that it received $2.2 billion in redemption requests linked to Coffey's departure.

GLG will block withdrawals from its Market Neutral Fund for six months and will tell investors looking to leave its Emerging Markets Fund they will not get all their money back because some of the fund's investments are too illiquid to sell, according to the Sunday Times.

GLG spokesman Andy Merrill declined to comment.

Moore's hires this year also include Paul Findley, a former portfolio manager at London-based Threadneedle Asset Management Ltd. Findley joined Moore to trade European equities. Moore also added three traders and an analyst from RBS Greenwich Capital Markets Inc. based in Greenwich, Connecticut.

To contact the reporter on this story: Katherine Burton in New York at kburton@bloomberg.net; Tom Cahill in London at tcahill@bloomberg.net

Last Updated: November 3, 2008 15:29 EST