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Tantallon Capital, founded by Merrill Lynch & Co. former head of sales Nicholas Harbinson, closed one of its hedge funds after the Singapore-based firm had its worst performance because of bad bets on Asian stocks, three people familiar with the matter said.
The firm shut down its Tantallon Smaller Companies Fund, managed by Steve Sun, after it lost 25.6 percent this year, according to data compiled by Bloomberg, more than twice a benchmark that tracks similar funds. Assets shrank to $18 million as of end July, from as much as $29 million in February, the people said, asking not to be identified because details are private.
Assets in Tantallon Capital's flagship Tantallon Fund, which underperformed peers this year following double-digit returns from 2004 to 2007, decreased 40 percent as clients withdrew money. Tantallon Capital is the fourth-largest hedge fund in Singapore with $1.43 billion assets under management.
The market turmoil, that wiped $19 trillion off global stock markets in the first nine months of this year, has hurt even the most experienced managers, said Jennifer Carver, who runs the Asian business of 3A SA, the alternative investment unit of Geneva-based Banque Syz & Co.
``There are a lot of funds out there that are effectively net long that are getting killed this year,'' said Hong Kong- based Carver, adding that 3A doesn't invest in Tantallon's funds. ``The bigger funds have lost a lot of assets too, their performance has been bad; smaller funds have to close quicker because they don't have the depth of the larger funds to keep going.'' Read more...