Eclectica Profits Plummet As Performance Fees Evaporate

Dec 17 2010 | 12:46am ET

A cautious Eclectica Asset Management missed out on last year's hedge fund rally—so its managers missed out on a big payday.

The London-based firm saw its profit fall almost 80% in the 12 months through March 31, since the firm collected no performance fees in 2009, when its flagship fund fell 8%. Eclectica's partners split just £1.7 million between them, compared to £8.6 million during the prior year.

The Eclectica Fund returned an impressive 32% in 2008, while the average hedge fund lost almost 20%.

Eclectica may miss out on performance fees again this year: The US$230 million fund is up just 5% this year, the Financial Times reports. It had been up 15% through August before taking a hit during the bond-market selloff.

"Our view is that the economic recovery is still very fragile," partner Tim Arengo-Jones told the FT.

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