A crisis of confidence has ended one hedge fund manager’s dozen-year run.
John Botti told investors earlier this month that he would close his Emrose Capital, which he launched in January of last year after a decade at hedge fund Botti Brown, now Spring Point Capital. Botti explained that the $402 million firm’s recent losses have caused him to question his strategy, Hedge Fund Alert reports.
“Knowing that I could structure portfolios that would break even and most likely produce gains in declining markets has been something that I could always depend upon,” he wrote in a letter dated Sept. 9. “Our recent losses in the midst of a declining market have cast doubt around this long-standing assumption.”
Botti is not giving up on that strategy entirely, even after he finishes liquidating it in November. Instead, he’ll continue to use it to manage his own money.
Nor is Botti entirely giving up on the hedge fund industry, despite his claim that he won’t launch a third. He’ll continue to manage Mt. Tam Capital, a fund of hedge funds he launched with several other Bay Area hedge fund managers. In addition, he plans to seed Jason Williams, who currently works with Botti at Emrose and plans to launch a hedge fund of his own.
Emrose’s Patrick Tenney and Kim Best will move over to Mt. Tam.