Post by ukipa on Dec 9, 2011 6:35:34 GMT 4
www.bloomberg.com
Buchan’s Hunter Global to Return Cash in $1 Billion Hedge Fund
By Kelly Bit - Dec 8, 2011
Hunter Global Investors LP, the $1 billion hedge fund run by Duke Buchan III, is returning capital to investors following poor performance this year, according to a letter sent to clients.
“The past year, particularly the last four months, has been frustrating,” Buchan said in the letter, a copy of which was obtained by Bloomberg News. “Our recent drawdown does not meet our organizational or my personal expectations.”
Hunter, which outperformed U.S. stocks by 46 percent from its inception in 2001 through March 31, according to the letter, has struggled this year as market swings driven by Europe’s sovereign-debt crisis undermined asset selection, Buchan said. Industrywide, hedge-fund liquidations last quarter rose to the highest since the start of 2010, according to a report today by Chicago-based Hedge Fund Research Inc.
Buchan, who didn’t give returns for later months in 2011, said clients will receive a “substantial portion” of their money in January. The firm’s investments are mostly “liquid”with the exception of a holding in Aveta Inc., which represents about 3.6 percent of each of Hunter’s funds.
Buchan founded the New York-based long-short equity fund and serves as its chief investment officer and primary portfolio manager. Before founding Hunter, he was a managing director at Maverick Capital Ltd. and served as the sector head of its global financial services group. Before that, he was a vice president at Merrill Lynch & Co. in New York, where he also specialized in corporate finance and mergers and acquisitions in the United States, Europe and Latin America.
‘Personal Decision’
“My decision is a personal one,” Buchan said in the letter. “It has been distressing for me to know, despite our best efforts, the extent to which our recent drawdown has impacted you.”
Hedge-fund liquidations climbed to 213 in the third quarter from 191 in the second quarter and 168 a year ago, according to HFR. Hedge funds fell 1 percent on average in November, bringing this year’s loss to 3.8 percent, according to Bloomberg’s aggregate hedge-fund index.