Facing weak returns, fast-growing Pirate Capital has closed to new investors and set out to right its course, according to MarketWatch. Growth of the fund, which held $2 million in assets 2002, and today holds $1.7 billion, has recently concerned some investors. News that returns for the Jolly Roger Offshore Fund would be less than 6% this year, compared to 24% in years prior, exacerbated these worries. In a letter to investors last week, founder Thomas Hudson announced the fund would close to new investors and focus on growing the assets it has now. The letter also announced the resignations of fixed-income portfolio manager Carl Klien, analyst Zachary George and analyst David Lorber. Hudson asked two other analysts, David Muccia and Matthew Goldfarb, to resign Wednesday, he said. “Along with growth in assets came growth in personnel,” the letter said. “My time, which was originally spent exclusively on the portfolio, the aspect of the business I love most, eventually was split between the demands of raising capital and overseeing the work of analysts.” The new tem is Hudson, Stephanie Tran, Peter Desloge, Glenn Haberfield and Chadd Kirk. Meanwhile, the Securities and Exchange Commission is prodding Pirate to determine whether it reported stock sales in a timely fashion. SEC Commissioner Christopher Cox has recently and repeatedly voiced his intention to examine hedge fund operations and their effects on the market, despite the nullification by courts of the agency’s registration rule. The attention comes after the steep losses Connecticut-based Amaranth faced last month, when the $9 billion fund lost half of its value, and drew attention of regulators. Perhaps sensitive to the tarnished image of these alternative funds, Hudson assured investors in his letter that his family has more than 90% of their net assets invested in the firm. “No one is more committed to this firm and its continued success as I am,” he wrote. The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.
Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.
Insight and analysis into the management, marketing, operations and technology of the asset management industry.
Have an account? Sign In