Moore Capital’s Coffey Bows Out as Markets Stymie Funds
Moore Capital Management LLC’s Greg Coffey is calling it quits amid markets that have proved difficult for even the most nimble hedge-fund investors.
The 41-year-old told investors yesterday in a letter that he’s leaving the hedge-fund industry after a trading career spanning almost two decades. He plans to spend more time with his family and in his home country Australia.
“It seems like he has lost his mojo,” said Vidak Radonjic, managing partner at Beryl Consulting Group LLC in Jersey City, New Jersey, which advises clients on investing in hedge funds. “Hedge-fund traders should be making money in both rising and falling markets.”
Coffey, who has lost money for clients in the past two years, follows other high-profile hedge-fund managers to step away from trading as Europe’s sovereign-debt crisis and concerns over global economic growth roils markets. Chris Rokos, 42, a co-founder of Brevan Howard Asset Management LLP, retired to “pursue his personal interests,” the London-based firm said in August. Billionaire energy trader John Arnold, 38, former Morgan Stanley co-president Zoe Cruz, 57, and oil trader Pierre Andurand, 35, shuttered their hedge funds this year.
“The demands of my growing family mean that I am unable to commit to the market with the same intensity going forward,” London-based Coffey said in the letter, a copy of which was obtained by Bloomberg News.
Coffey, who is co-chief investment officer of Moore’s European business, will return client money from his GC Emerging Macro Fund as of Nov. 30, he said in the letter.
Coffey, whom billionaire founder Louis Moore Bacon called “one of the most impressive traders in the world” when he hired him four years ago, has had mixed performance since joining New York-based Moore. That had fueled speculation among investors that he might leave.
Assets in Coffey’s macro fund have slumped to about $450 million from as much as $1.6 billion in 2010. The fund had fallen about 10 percent this year through August before recouping most of the loss last month, according to people with knowledge of the matter, who asked not to be named because the information is private. The fund lost 5 percent last year.
After he had recovered most of this year’s losses in one week in September, Coffey realized he wasn’t as excited about his gains as he might have been in the past, two people who know him said. Coffey then decided it was time to quit, the people said.
“Greg Coffey has been a significant contributor to Moore’s European business, and we are disappointed that he is choosing to retire from the industry,” Bacon, 56, said in an e-mailed statement yesterday. “We wish him well in all future endeavors.”
Moore, which manages about $13.5 billion, pulled money from Coffey’s fund last year and removed hard-to-sell assets that he inherited when he joined the firm, people with knowledge of the matter said at the time. The move was a mutual decision between Bacon and Coffey to cut the trader’s capital amid markets plagued by the European sovereign-debt crisis, the people said.
Coffey has returned an annualized 4.5 percent since he joined Moore in November 2008. Emerging-market funds have climbed 7.9 percent a year, while all hedge funds have gained an average of 6.5 percent in the same period, according to Hedge Fund Research Inc.
The firm last year renamed Coffey’s emerging-markets macro fund, and two vehicles he started in 2009, to add his initials as part of a rebranding of his products. One fund focuses on emerging-market stocks and lost 16 percent this year through September, while the other trades emerging-market currencies and fixed-income securities and fell 2.3 percent, according to investors.
Emerging-market stock funds rose an average of 5.5 percent this year through September, while emerging-market debt funds declined 2.2 percent and macro funds dropped 0.5 percent, according to data compiled by Bloomberg. Hedge funds gained an average of 3.6 percent.
Darren Read, who ran the stock fund with Coffey, will continue to manage the fund and investors will have the option to pull their money as of the end of November, one of the people said. Eric Dannheim, Coffey’s deputy, will continue to oversee the debt fund, from which investors can redeem on a monthly basis.
Coffey was the first trader to share the CIO title with Bacon since Moore’s inception 23 years ago. Coffey owned a stake of between 10 percent and 25 percent in Moore Capital Management LP as of Feb. 2, according to a document filed by Moore with the U.S. Securities and Exchange Commission in March.
Some colleagues and investors said they considered Coffey as a possible successor to Bacon when he eventually steps back from trading. Bacon didn’t hire Coffey with that intention, people with knowledge of his thinking said.
Coffey joined Moore with his 12-person team from London- based GLG Partners Inc., where he oversaw more than a quarter of the hedge fund’s $24 billion of assets in 2008 before he left the firm.
The U.K.’s Sunday Times dubbed Coffey the “Wizard of Oz” in a nod to his homeland after his fund surged 51 percent in 2007 and 60 percent in 2006 amid a rally in emerging markets.
Coffey was GLG’s top performer, winning industry awards for his funds. Events started going awry for him in 2008 when he began losing money, and he subsequently resigned in April that year, triggering a slump in GLG’s shares and prompted investor redemptions.
Coffey lost money for GLG clients in 2008 when some of his investments became illiquid during the global financial crisis.
Coffey was the 11th-wealthiest hedge-fund manager in the U.K., with an estimated net worth of 260 million pounds ($420 million), London’s Sunday Times reported in April. He paid about 5 million pounds two years ago for an 11,500-acre (4,650- hectare) estate, complete with its own shooting grounds, on the Scottish island of Jura. Coffey bought two mansions in Sydney in 2005 and 2006, people familiar with the matter said.
He graduated in 1994 from Sydney’s Macquarie University and started his career at Bankers Trust Corp., according to fund marketing materials. Coffey worked at Blue Border, a George Soros-backed hedge fund, and Bank Austria, before joining GLG in 2003.
Coffey’s departure is the latest in a series of changes at Moore Capital. Bacon told clients in August that he planned to return about $2 billion, or about 25 percent of his main fund, to investors, saying it may be too big for him to generate returns in line with historic profits as “liquidity and opportunities have become more constrained.”
The firm cut as many as 15 investment jobs last month as part of a restructuring of its equity teams, three people with knowledge of the matter said at the time.
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