Avesta Capital Advisors LLC, a $636 million equity hedge fund run by William Tung, is giving back outside capital after almost a decade in business, according to a letter sent to investors.
Tung, 41, will return to New York-based Moore Capital Management LP, where he worked for six years before starting his own fund. Moore, run by Louis Bacon, is a so-called macro firm, which chases macroeconomic trends by trading stocks, bond, currencies and commodities.
“Given the prominent role that ‘macro’ is playing in the stock market these days, and given my desire to emphasize the ‘top-down’ in Avesta’s process, being at a macro shop such as Moore will only facilitate greater chances of success,” Tung said in the letter, dated Jan. 12.
Tung joins at least three other hedge-fund managers who said they are planning to return capital. In December, Henry Swieca, founder of two-year-old Talpion Fund Management LP, said he was giving back client money because he didn’t want to register his fund with the U.S. Securities and Exchange Commission, a person with knowledge of the matter said at the time. Tim Leslie, head of James Caird Asset Management LP in London, told investors he was liquidating his credit fund following losses in 2011. Duke Buchan III said he was closing Hunter Global Investors LP following poor performance last year.
Avesta lost 6.4 percent in 2011, according to an investor in the fund who asked not to be named because the information is private. The fund returned 6.5 percent a year, on average since it began in September 2002, compared with a return of 5.5 percent for the Standard & Poor’s 500 Index, Tung said in the letter.
A spokesman for Avesta declined to comment.
Traders are paying more attention to macroeconomic forces after they saw stocks move in lockstep last year. Industrywide, hedge-fund closures last quarter rose to the highest since the start of 2010, according to Chicago-based Hedge Fund Research Inc.
Avesta will return most of the capital to investors by the end of February. He may re-open his fund to clients at some point in the future, he said.
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