Fortis Investments & Hedge Fund ClosuresWhile these closures might have come during a period when many people are questioning the future of hedge funds, they surely not the results of Fortis wanting to pull out of the hedge fund business because of the industry's downfall. It looks like a specific case of bad performance and not enough talent to go around to market all of the firm's products effectively. The end of hedge funds has been predicted at least 20 times since this HedgeFundBlogger.com was started.
The following piece on Psigma Investment Management is being published as part of our daily effort to track hedge fund events in the industry. To review other hedge fund related announcements please see our Hedge Fund Tracker Tool.
Fortis has closed three small hedge funds following its takeover of part of ABN Amro and merger of the Belgian and Dutch banks’ asset management businesses. Fortis Investments said it had shut down half of its stable of six hedge funds due to personnel changes, the need to switch staff to the enlarged long-only business and, in one case, poor performance. The closures were first reported by HFM Week.
The closures – two of which took place at the end of June, and the third at the end of last year – come amid widespread predictions that poor performance and withdrawals by investors will lead to a shrinkage of the industry after a decade-long boom.
Fortis said it planned to set up new funds as and when it spotted opportunities and staff, and would seed launches with its own money. The Fortis European long/short fund, at €120m ($167m) the largest of the three, is being shut after the decision to bring in the ABN European equity team, headed by Andrew King. Mr King did not want to run a hedge fund, Fortis said. The fund was down about 4 per cent so far this year when it was shut, about in line with the average equity hedge fund.
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