London Diversified Cuts Back As Assets Plunge 90%

May 26 2010 | 12:19pm ET

Hedge fund London Diversified Management has seen more than 90% of its assets evaporate over the past two years, as investors fled its flagship and its faltering performance.

London Diversified managed just US$300 million at the end of last year, according to Financial News, down from US$5 billion at the beginning of 2008. But thanks to aggressive cost-cutting—and the departures of 13 partners since September 2008—the firm managed to turn a profit last year, despite the fact that it hasn’t collected a penny in performance fees since the middle of 2008, Financial News reports.

London Diversified’s flagship plummeted 28.1% in that year. But unlike many of its peers, it failed to join in the double-digit rally that pushed many hedge funds above their high-water marks last year, when London Diversified returns only 4.9%. It was up 1.2% in January, according to FN. A smaller fund managed by the firm did even worse, dropping 33.3% in 2008, rising 4.4% last year and dropping another 1.3% in January.

Still, the firm’s assets are back up to about US$500 million, including US$200 million in a managed account. London Diversified posted a £31.9 million profit on £34 million in revenue in the year ended Aug. 31, 2009, thanks to slashing administrative expenses to just £2 million. In the previous year, the firm earned £ 115.5 million on £141 million in revenue.

In the 14 months, London Diversified has cut ties with partners Argyris Bikos, Steven Fage, Adrian Rates, Scott Brown, Alireza Satrap, Marcus Browining, Richard Owen, Elizabeth Fitzgerald, Andrew Clare, Shamik Dhar, Carmine Di Conno, Daniel Gabay and Jeremy Gelber. It has not hired a new partner in almost two years.


In Depth

AIMA: Smaller Firms Remain the Lifeblood of the Hedge Fund Industry

Jul 26 2017 | 5:55pm ET

It is a hedge fund industry truism that the largest managers receive the most attention...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Rastegar: PE Real Estate Gains Momentum as Uncertainty Rises

Jul 21 2017 | 6:04pm ET

The steady march of equity markets and fundamental shift in the direction of Fed...

 

From the current issue of