Chesapeake Hedge Fund to Return Client Money After 25 Years

  • Baltimore firm is among a handful of hedge funds run by women
  • HFR says 291 funds closed in first quarter, 34% jump from 2015

Chesapeake Partners Management, one of a handful of hedge funds run by a woman, will return money to investors after 25 years.

The $1.4 billion firm managed by Traci Lerner will transform into one that oversees her own wealth, she said in an e-mailed statement on Wednesday. Chesapeake, based in Baltimore, followed an event-driven strategy, wagering on corporate actions such as takeovers and bankruptcies.

“The unintended consequences of the 2008/2009 financial crisis and all that has ensued from it have made the environment so hostile to investing that it’s become difficult as a fiduciary to manage other people’s money,” Lerner, 56, said.

Chesapeake generated an average annual return of 14 percent since inception, a person with knowledge of the firm said.

Lerner three years ago criticized Paul Tudor Jones when the billionaire hedge fund manager said that women can’t compete with men as macro traders after having children. Lerner said his comments were offensive and inaccurate.

“Jones should never tell half the world they can’t do his job because they were born female,” Lerner wrote at the time. “In so doing, Jones not only does them a great disservice but wrongly attributes his own success to being a man.”

Jones later apologized for his remarks.

Lerner started Chesapeake with her husband Mark, 58, in 1991 after working at Dillon Read & Co. and Citicorp.

About 291 hedge funds liquidated in the first quarter, compared with 217 closures in the same period last year, according to Hedge Fund Research Inc. Third Point founder Dan Loeb said in April that the industry was in the early stages of a “washout” after “catastrophic” performance this year.

Barry Wittlin, a former top proprietary trader at Merrill Lynch & Co. who managed money for billionaire Alan Howard’s hedge fund, in April said he was closing his fund, WCG Management, after almost a decade.

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