Nevsky’s Taylor Scales Back With $800 Million Fund
Nevsky Capital LLP’s Martin Taylor, who decided a year ago to step away from the “intensity” of running a $3.3 billion hedge fund, is starting a new version one-fourth the size, said two people with knowledge of the plan.
Taylor, 41, and partner Nick Barnes, 36, aim to manage a fund with no more than $800 million when they shut their London- based Nevsky Fund Ltd. at month’s end, according to the people, who asked not to be identified because the information is private. Requests by clients to join the new fund, which will invest mainly in global stocks with a focus on emerging markets, have exceeded the amount Taylor and Barnes want to oversee.
The pair announced in March they would wind down the bigger fund, saying neither wanted to “commit to managing the fund’s portfolio with the intensity that they would wish to continue to provide.” The fund, which has gained 25 percent a year on average since inception at the start of 2001, invests mostly in Asia, Russia and Latin America, forcing managers to track markets from early morning to late night, the people said.
“It’s unusual to see managers want to oversee smaller strategies once they’ve been so successful,” said Max Ferri, head of operational due diligence at hedge fund consultant Laven Partners in London. “There could be perfectly good reasons such as less liquidity and market depth in the markets in which he’s investing.”
The new version’s smaller structure will reduce the number of trades and clients, as well as the time Taylor and Barnes must spend marketing the fund. Taylor declined to comment. Barnes didn’t respond to an e-mail.
Called Nevsky Fund Plc, the new fund will be freed from a requirement imposed on its predecessor that at least half the portfolio be invested in emerging markets, according to the people. The change gives the pair more freedom to walk away from investments when they’re unsure how the holdings will perform.
Hedge funds are private pools of capital whose managers can buy or sell assets and bet on falling as well as rising prices. Nevsky, like many of its rivals, charges 2 percent of assets under management to cover costs plus 20 percent of any profits.
Nevsky Fund Ltd., which invests in foreign-exchange instruments, bonds and commodities along with stocks, gained 10 percent in 2010 after climbing 32 percent in 2009, according to data compiled by Bloomberg. Hedge funds overall rose 7 percent last year and 10 percent in 2009, the data show.
Taylor and Barnes started the original fund while working for London-based Thames River Capital, setting up their own firm to manage it in 2007. Both previously worked at Baring Asset Management Ltd., focusing on investments in Eastern Europe.
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