James Caird Asset Management LP, the London-based firm run by former Moore Capital Management LLC trader Tim Leslie, plans to liquidate a $1.6 billion credit hedge fund after eight years following losses in 2011.
“I have been frustrated by our performance during the current year,” Leslie, 45, wrote today in a client letter, a copy of which was obtained by Bloomberg News. He plans to start returning money to investors in the JCAM Global Fund in January.
The fund lost 8.9 percent for 2011 through November, according to a person familiar with the matter, who asked not to be identified because the information is private. Hedge funds lost an average of 3.8 percent, according to data compiled by Bloomberg.
An increasing number of money managers have shuttered hedge funds in recent months after Europe’s debt crisis roiled markets and limited investment opportunities. The number of funds liquidating in the third quarter rose to 213, the worst three-month period for the industry since the first quarter of 2010, according to Chicago-based Hedge Fund Research. In the second quarter, 191 hedge funds shut.
Hedge fund manager Duke Buchan III told clients last week that he was closing his $1 billion stock hedge fund, Hunter Global Investors LP, according to a letter obtained by Bloomberg News.
Leslie attributed the losses to “poor liquidity and the unfolding crisis in financial markets.” He said the lack of market liquidity is “structural” and not something that will go away any time soon. As a result, he plans to start a smaller hedge fund with a “narrower trading focus,” according to the letter.
The new fund will start next year and be managed by Robert Miller, who has worked with Leslie since 2003, according to the letter. Leslie seeks to raise $500 million for the new fund and cap assets at about that level, the person said.
JCAM Global clients who invest in the new fund will receive “preferential terms,” the letter said. Leslie will probably hold off on charging existing investors performance fees should the new fund produce positive returns, the person said.
Leslie wasn’t available to comment, according to a spokesman for James Caird.
Leslie started the JCAM Global fund in 2003 while trading for Moore, the New York-based firm run by Louis M. Bacon. He left the firm in 2008 and continued managing the JCAM fund at James Caird. Moore is an investor in the JCAM fund. The fund has gained 8.3 percent a year on average since 2003, according to today’s client letter.
James Caird also manages two other hedge funds, the $150 million Vintage II fund and the $70 million Mortgage Opportunities fund. The firm will continue running those two funds, the person said.