Another Hedge Fund Giant is Returning Investor Capital

Louis Bacon is stepping away from Moore Capital Management, which will return money to investors from three of its flagship funds “while continuing to invest on behalf of the firm’s partners,” according to an article in Bloomberg.

Bacon, who the article describes as a “macro specialist”, became known for exploiting discrepancies between global interest rates and bond yields—but has found fewer opportunities to make money as central banks are once again easing monetary conditions. In a letter to investors, Bacon wrote, “Reducing our asset base with this return of client capital will obviate the necessity for my taking on the lion share of risk of the firm on a daily basis.”

Bacon’s firm reportedly managed about $13 billion at the start of 2018, but the amount dropped to $8.9 billion by the end of that year.

The article notes that Bacon is “far from alone in losing customers, “citing other macro managers who have closed funds in recent years including Paul Tudor Jones and Hugh Hendry. According to eVestment data, investors pulled $180 million from macro hedge funds in October, marking the 10th consecutive monthly outflow from that type of hedge fund.