Jabre Will Close His Flagship At US$2.5 Billion

Jan 26 2010 | 12:08pm ET

Jabre Capital will close its flagship hedge fund to new investments after the multi-strategy vehicle soared last year.

Jabcap Multi Strategy will hard close for two years when its assets hit US$2.5 billion, the Financial Times reports. The fund currently manages US$2 billion after returning more than 85% to investors last year, easily erasing its 2008 loss of 36% and thensome.

Jabre, who founded the Geneva, Switzerland-based hedge fund three years ago after leaving GLG Partners, is bucking an industry trend in closing the fund: A recent Credit Suisse Tremont Index report showed that the proportion of hedge funds closed to new investors fell from 17% to 13% over the past two-plus years.

But Jabre says the move is necessary to keep the fund’s performance strong.

“If you get too big, then you end up paying the price for being oversized,” he told the FT. “One has to remain nimble.”

What’s more, “the bigger you grow, the more you end up managing people rather than investments.”

Which is not to say that Jabre expects this year to produce the returns he managed last year.

“2010 is likely to be a quieter year as central banks initiate their withdrawal from the programs that brought stability and confidence to the markets,” he wrote to investors last week. “As a result, we are using the strong liquidity of January to reduce market risk in all our funds.”

Investors who still want a piece of Jabre will have their avenues even after Jabcap Multi-Strategy closes. The fund manages a total of US$5 billion, and will begin managing a convertible bond fund for Swiss private bank Pictet & Cie this month.

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