Paulson Protégé Pellegrini To Return Outside Money

Aug 20 2010 | 12:39pm ET

Paolo Pellegrini, the former Paulson & Co. portfolio manager credited with the hugely successful subprime mortgage investment strategy that put that firm on the map, plans to return outside capital in his hedge fund, just 10 months after opening that vehicle to investors.

Pellegrini told investors that he would return their money by the end of next month. The PSQR Capital founder, who opened the PSQR Master Fund to investors in December building up an impressive two-year track record, said he would continue to manage his own money through the fund, AR magazine reports.

In a letter to investors today, Pellegrini said he decided to stop managing outside money because of the “additional work” required on the fund due to his bearish outlook on the economy.

So far, that strategy has not proven nearly as profitable as the one that helped earn Paulson triple-digit returns in 2007. The PSQR fund lost 3.16% in the first half.

“While my views on global economies haven’t changed, I’ve concluded that substantial additional work is required to position the Fund to profit consistently from those views,” Pellegrini wrote. He said that, if he accepts outside capital into the fund again, he would honor current investors’ high-water marks.

According to AR, it is unclear what will become of PSQR’s staff.

Pellegrini launched PSQR in April 2008, and returned 40% that year and 61.6% last year.


In Depth

JOBS Act Propels Real-Estate Crowdfunding Platform

Oct 21 2014 | 2:57am ET

If D.J. Paul were a real estate development, he would be described as “multi-use...

Lifestyle

Strippers Accused Of Robbing Hedge-Fund Manager Face Jail

Oct 20 2014 | 9:20am ET

A group of alleged stripper-thieves—whose victims include a hedge-fund manager...

Guest Contributor

PAAMCO: European Equity Exposure - Challenging Year, But All is Not Lost

Oct 16 2014 | 4:12am ET

European equity hedge fund managers have had a tough time so far this year. The...

 

Videos

Editor's Note

    Must Attend Hedge Fund Charity Events For October

    Sep 30 2014 | 9:29am ET

    The crisp Autumnal days of October are upon us, and so are a few of the hedge fund industry’s favorite charitable events. If you have never been to Rocktoberfest, well, you are missing out. And for a quieter evening of sipping and socializing, stop by HFC’s Wine Soiree. Read more…

 

Futures Magazine

October 2014 Cover

Deeply flawed risk benchmark

Most traders agree that proper risk management is the key to successful trading. However, many traders depend on the deeply flawed measure of standard deviation as a benchmark of risk. Here we put it ...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.