- The $3.3 trillion hedge fund industry saw several big names call it quits in 2019, as Appaloosa founder David Tepper and Moore Capital chief Louis Bacon both decided to turn their funds into family offices, while Bridgewater's co-CEO Eileen Murray announced she is leaving her post next year.
- Other names, like BlueMountain co-founders Stephen Siderow and Andrew Feldstein, were partially pushed out of the industry thanks to poor performance.
- In the last couple years, big names like Jonathon Jacobson, Leon Cooperman, Jason Karp, John Griffin, Eric Mindich, and more have closed down their funds.
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Jonathon Jacobson, the billionaire founder of Highfields Capital Management who returned outside capital last year, reportedly wasn't having fun anymore when he closed his fund.
David Tepper, however, looks like he's having the time of his life.
The billionaire founder of Appaloosa Management announced that he was turning his fund into a family office in May, with the understanding that he'd be spending more time focusing on the football team — the NFL's Carolina Panthers — he recently bought.
Not only has he put his stamp on Panthers already, firing the firm's long-time coach, but Tepper has also brought a Major League Soccer team to Charlotte. According to The Charlotte Observer, Tepper — who was known for having a set of brass testicles on his office desk at New Jersey-based Appaloosa — teased the mayor of Charlotte at the announcement ceremony for the new team, imitated Elvis, and predicted that the soccer games will be "a little bit of a party."
"Charlotte loves a party. And we're going to bring them a party," he said.
While not every big name that has stepped back or left the hedge fund industry this year is living it up like Tepper, there are still notable things on the horizon for people like Eileen Murray and Louis Bacon.
David Tepper
Tepper is probably the biggest name heading out of the industry, and one of the few remaining managers who made big bets on any asset class he found favorable.
While the May announcement stated he was returning outside capital, a Bloomberg piece from October notes that Tepper will keep the fund open for roughly 15 investors who will have between $1.25 billion and $1.5 billion in the fund. The article described it as a part of the process for Tepper to transition to a family office.
Already, there have been people leaving Tepper's orbit to start their own fund. Andrew Casino, a partner at the firm, has started Baymount Capital in Florida, and Peter Rosenblum will launch 140 Summer Partners next year.
Eileen Murray
Bridgewater co-CEO Eileen Murray, the most senior woman in the male-heavy hedge fund space, did not end up becoming the first woman to lead one of the major American banks, despite her name being floated for the Wells Fargo job.
But she did announce she is leaving Ray Dalio's shop next year, where fellow co-CEO David McCormick will become the sole CEO.
She's not retiring, but instead moving onto "the next chapter of her career."
At the Project Punch Card conference in December, she declined to say what exactly she is going to do beyond saying that'll "be with people I really like" on a topic she is passionate about.
Louis Bacon
Billionaire Louis Bacon told investors in December that he is returning outside capital after nearly 30 years running Moore Capital, named after Bacon's middle name. The letter to investors stated that the flagship fund returned over 21,000% since inception, despite disappointing returns over the last couple of years.
The firm plans to launch individual funds run by "our best performing portfolio managers" in macro and long-short equity, but Bacon himself will step back from managing the money. Bacon named two portfolio managers, Joeri Jacobs and Erik Siegel, who have had success in running individual funds on the Moore platform before.
Bacon's next move is unknown, though he is a big conservationist. He gave a 90,000-acre ranch to conservation efforts in 2012.
The macro closures didn't stop at just Bacon though; a trio of traders that used to work for Moore and started the fund Stone Milliner in 2012 are returning capital to their investors after a run of poor performance.
Thomas Kempner
The co-founder of one of Europe's biggest hedge funds, Thomas Kempner is retiring when the calendar changes, he announced in April of this year.
Kempner had been running Davidson Kempner since 2003, when co-founder Martin Davidson retired after starting the fund in 1983. Kempner had co-run the firm with Tony Yoseloff since 2018 in preparation for Kempner's retirement.
Kempner will consult and keep his family's wealth in the firm until 2024, according to a letter to investors that Bloomberg saw.
Andrew Feldstein and Stephen Siderow
BlueMountain's co-founders closed several hedge fund strategies and became a part of insurer Assured Guaranty this year.
Andrew Feldstein, who has been described as one of the generation's top fixed-income investors, is now Assured Guaranty's asset management head, but closed BlueMountain's flagship fund to focus on CLOs. Stephen Siderow, Feldstein's co-founder, is leaving the firm at the end of the year.
Prior to the sale, the firm had also closed its discretionary long-short strategy as well as its systematic equity fund.
When the manager announced the closure of its flagship fund, the $2.5 billion Credit Alternative fund, the firm said it would focus on launching strategies "aligned with the firm's focus on collateralized loan obligations (CLOs) and structured finance."
"Such strategies will include the areas of CLO equity tranches, as well as asset-backed securities focused on private debt investments in specialty finance companies and assets," it said.
Marcos López de Prado
Marcos López de Prado was one of the biggest wins in the talent war by AQR when the Greenwich-based manager snagged the machine-learning expert in 2018.
Less than a year later, the academic left Cliff Asness's firm. Bryan Kelly, a fellow academic from Yale, was put in charge of AQR's artificial intelligence unit.
"During my tenure, I enjoyed collaborating with the innovative team at AQR on machine learning tools and techniques, and I am confident that AQR will continue to succeed for decades to come," López de Prado, a principal at the firm, said to Bloomberg after he left AQR.
He has since founded True Positive Technologies, which partners with asset managers to help them get "to the 21st century," according to the firm's website.
Stephen Mandel Jr.
Tiger Cub and billionaire Stephen Mandel Jr. is still managing the business of his long-running hedge fund, Lone Pine Capital, but announced at the beginning of 2019 that he was stepping back from managing money.
His firm, which recently told investors its thoughts on value Investing's future and healthcare in the United States, manages $19 billion across several funds.
Mandel has flown under-the-radar compared to more colorful contemporaries, but the industry has recognized his talent for stock-picking.
In a Barron's story after he announced he would not longer be investing, fellow billionaire hedge fund manager Seth Klarman told the publication that Mandel was "the best industry analyst I've ever met, who became the best long-short hedge-fund manager of his generation."
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