John Burbank Shuts Down His Long-Short Hedge Fund

Tyler Durden's picture

We almost made it a full month without a prominent hedge fund shuttering - an eternity in an age when ETFs and passive vehicles soak up several billion in capital each day at the expense of "active" managers - and then Bloomberg spoiled the streak when moments ago it reported that John Burbank, one of the handful of investors who made a killing from shorting subprime, and head of the $2.4 billion Passport Capital is shutting down one of his core hedge funds, the latest in a string of closings hitting the industry.

Passport Capital’s Long-Short Strategy Fund is winding down and will return money to investors. The fund, which had an AUM of $833 million as of December 31, and $636 million as of March 17 according to HSBC, lost 2.1% in the first two months of this year. In 2016 the Long-Short fund lost 11.8% reversing its 2015 gains, when Passport Long/Short gained 10.1%.

A catalyst for the closure may have been a January 2017 decision by the San Bernardino employees fund to pull its funds from Passport.

Bloomberg adds that the firm’s flagship Passport Global Strategy Fund will remain open.

A recent report by Hedge Fund Research showed that more hedge funds closed in 2016 than in any year since the financial crisis. Also on Wednesday, Guard Capital told investors that it’s closing its $885 million macro hedge fund. Last month, former Goldman Sachs trader Eric Mindich said he’s winding down his $7 billion firm, Eton Park Capital Management, which was one of the biggest hedge fund startups when it launched 13 years ago. In September, Richard Perry threw in the towel on his almost three-decade-old hedge fund.

Many more will follow, because as Goldman explained earlier this week, in a centrally-planned market, one which never falls, active returns are no nearly enough to prevent an LP exodus.

 

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Hurricane Baby's picture

The muppets are tapped out.

fellatio is not fattening's picture

does anyone have the link to Hedge Fund holdings?  Somehow it got deleted from my computer, was able to find some really profitable ideas looking that over, if so thanks in advance

Rodders75's picture

Is your avatar what I think it is?!?

Veruca Salt's picture

Aren't these investment vehicles supposed to hedge against risk and turbulent times?

silverer's picture

Oh, you had to bring that up huh? LMAO

silverer's picture

It's racist, I tell ya!

peterk's picture

hedge funds are closing because people are pulling their money out... not due to low returns.

why are they pulling finds out... simple.. the cost of money is rising and the funds are "debt" that

needs to be serviced. Its the CARRY TRADE UNWIND.

the hedge fund industry is fuelled with  loaned capital, particularly from japan.

Hedge fund redemptions began to rise  exactly when  japanese short term rates started moving up  over a

year ago.

The fund redemptions signal that the age of cheap money is over.

uhland62's picture

So, there are a few less hedge funds. What difference does that make to the price of eggs? 

peippe's picture

So does the letter say:  '.....I thought I'd be good at this hedge thing but 

                               it turns out I suck at it so here's what's left of your 

                               money back.........'

Scuba Steve's picture

... Sincerely, Mr. Chelsea Clinton husband

KFBR392's picture

who gives a flying f about the fate of another "hedge" fund. used to be a fancy word. i can lose 2% in the market ytd all on my own fuckers. hope u left a lot of rich fucks less so!

FlKeysFisherman's picture

Good, put this asshole on "the list."

ds's picture

HF models do not work in deformed markets. Get close to the spigots of the CBs or suck at the teats of Govt Treausries. For that you need to be with the insiders and the Oligrachs (more so in developin economies). Otherwise, get out of the casinos and invest in your own skills and talent in the real economies. The parasatical chorus of analysts, private bankers, economisses are now entertainers that you can enoy like whores.