Ex-Merrill's Wittlin to Shut WCG Hedge Fund After Nine Years

  • Fund managed $3.4 billion in regulatory assets as of Dec. 31
  • Most of the money was in a fund run for Brevan Howard

Barry Wittlin, a former top proprietary trader at Merrill Lynch & Co. who manages money for billionaire Alan Howard’s hedge fund, is closing his firm after almost a decade.

Wittlin said he will liquidate assets in his hedge fund and return money to clients of his WCG Management by the end of June, according to a letter sent to investors Wednesday and obtained by Bloomberg. Wittlin, who gave no reason for the decision in the letter, didn’t return several phone messages and an e-mail seeking comment.

WCG Management, which is based in New York, is a macro fund that seeks to profit from economic trends by trading everything from currencies to commodities. The firm oversaw $3.4 billion in regulatory assets as of the end of last year, according to a March regulatory filing. Most of those assets are in the WCG Strategies Fund, a pool managed for Brevan Howard Asset Management, a separate filing shows.

Brevan Howard, also a macro hedge fund, is bracing for investor withdrawals as clients asked to pull about $1.4 billion at the middle of the year following more than two years of sub-par performance, people with knowledge of the matter said this month. Wittlin, a former head of global rates at Merrill, started WCG in 2007 and won backing from the bank. He rejected an offer at the time from Howard to join his fund, according to a 2013 article by Financial News.

The closure of Wittlin’s firm comes a day after Third Point founder Dan Loeb said hedge funds were in the first stages of a “washout” after “catastrophic” performance in 2016. The $2.9 trillion industry is having its worst start to a year in terms of returns and client withdrawals since 2009, when global markets were reeling from the most severe financial crisis since the Great Depression.

Macro hedge funds have struggled in recent months, with clients pulling $7.3 billion from such funds last quarter, according to Hedge Fund Research Inc. Across strategies, the industry had net outflows of $16.6 billion in the last two quarters, the most in seven years, HFR said. In 2015, 979 funds closed, more than any year since 2009, the research firm said.

In January, Nevsky Capital in London said it was shutting its $1.5 billion fund, following on the heels of firms including SAB Capital Management, BlackRock Inc. and Fortress Investment Group LLC who said last year they would be liquidating funds.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE