Tuesday, 30 August 2016
Last updated 44 min ago
Dec 15 2010 | 10:13am ET
Last month, FrontPoint Partners shuttered its healthcare hedge funds in the wake of an insider-trading investigation. And with no more healthcare funds, the embattled firm saw no reason to continue paying its healthcare team.
Greenwich, Conn.-based FrontPoint cut the entire 12-person team working on the funds at the beginning of November, according to published reports. The move came shortly after FrontPoint, which recently spun off from Morgan Stanley, acknowledged that Joseph Skowron, its lead healthcare manager, was the unidentified hedge fund manager named in the criminal complaint against a French doctor.
That doctor, Yves Benhamou, was accused of passing confidential information on the results of a drug trial to at least six hedge funds, among them FrontPoint. While neither the firm nor Skowron have been charged with any wrongdoing, FrontPoint suspended him pending an investigation.
Despite the lack of charges, investors began fleeing the $1.5 billion funds—as well as other FrontPoint funds. The firm has been hit with some $3 billion in redemption requests.
Last week, FrontPoint laid off more than two dozen non-investment staffers as it moves to cut costs in the face of the redemptions. The firm employed 219 people as of the end of September.