Bond Hedge Fund 5:15 Capital to Close Down, Return Money
Bond hedge-fund manager 5:15 Capital Management LLC, named after a song by The Who, will wind down and return client money after redemptions, according to a letter obtained by Bloomberg.
The firm, which invests in government bonds, will shut by the end of the month after redemptions “driven by sector rotation” and “weakness in the fund-of-fund industry,” E.G. Fisher and Rob Wahl, co-founders of the Greenwich, Connecticut- based firm, wrote in the letter that was sent today to clients. Assets in the firm’s core strategy fell from a peak of $1 billion in early 2012 to $370 million as of April 1, they said.
“We did explore restructuring the firm to manage a reduced AUM level,” Fisher and Wahl wrote in the letter, referring to the firm’s assets under management. “We came to the conclusion that because our trading orientated strategy requires a significant and robust platform to meet our high standards for institutional quality risk management, execution, operational control and regulatory compliance, it is in our investors’ best interest to wind down the fund.”
Fisher and Wahl, former traders from Brevan Howard Asset Management LLP and RBS Greenwich Capital Markets, started 5:15 Capital in July 2009, naming it after a track from the British rock band’s 1973 album “Quadrophenia.” The flagship 5:15 Fund, Ltd. has returned 5.5 percent a year since its inception and posted positive returns every year except in 2013, during which it fell 0.4 percent, according to the letter. Its largest monthly drawdown was 2.5 percent in 2010.
Hedge-fund liquidations rose in the fourth quarter, with 238 funds closing during the three-month period and 873 shutting in 2012, the highest since more than 1,000 wound down in 2009, according to Chicago-based Hedge Fund Research Inc.
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