Ex-Citadel Credit Chief Boas Cancels Hedge Fund Plans

Chris Boas, a former global head of credit at Citadel LLC’s securities unit, canceled plans to start his own hedge fund after failing to raise money from investors.

Boas’s Longwood Credit Partners LLP “has decided not to pursue investor funds due to fundraising market conditions,” Andrew Honnor, a spokesman for the London-based firm, said in an interview today. Boas didn’t return an e-mail seeking comment.

Longwood was scheduled to start in the first quarter and follow a strategy that seeks to profit from price differences between debt securities, two people with knowledge of the matter said in August.

Boas, 41, struggled to raise money as investors have been hesitant to invest in hedge funds that lack an established track record of making profits. Sutesh Sharma, a former Citigroup Inc. proprietary-trading unit head who left the bank in 2011, scaled back his London-based Portman Square Capital LLP hedge-fund firm after failing to raise the $500 million it had originally sought from investors, two people familiar with the matter said in March.

A Goldman Sachs Group Inc. survey of 730 hedge-fund investors released this month found just 38 percent said they gave money to hedge funds in 2012 that were less than three months old.

Net demand for hedge funds focused on Europe fell to a negative 2 percent in 2012 after investors concluded that the region’s sovereign debt crisis would make it difficult for traders to make money, according to a survey of about 550 hedge-fund clients released in March by Credit Suisse Group AG.

Lower Demand

Of 13 geographic regions tracked by Credit Suisse, Europe was the only one to receive a negative figure last year. The Zurich-based bank derived net demand by subtracting the number of investors who said they intended to redeem from hedge funds from those who said they planned to add assets. Net demand for Europe-focused hedge funds has risen to 24 percent in 2013.

Boas was head of credit at Citadel’s hedge-fund business before he ran credit markets at the firm’s securities unit, which was disbanded in 2011. He had previously worked at Morgan Stanley in that firm’s structured-credit trading business.