Shumway Closure Irks Investors

Feb 11 2011 | 8:15am ET

The impending closure of Shumway Capital has more than a few investors ticked off at founder Chris Shumway.

The firm's abrupt decision, announced last week, to return money to outside investors came after Shumway spent months trying to reassure investors that the firm's future was safe after he stepped down as its lead manager. Following Shumway's announcement in November that he would hand the reins of the $8 billion firm to his deputy, investors sought to redeem billions. But Shumway himself reached out to a number of major investors, including funds of funds, promising to delay the handoff and to reassure them about the future.

Those investors were then blindsided by last week's news, which has them looking "stupid, like they don't know what's going on," one pension consultant told Hedge Fund Alert.

"I fully understand this complication was brought on by the changes that I chose to make, and as such I feel responsible to correct this mismatch of investment style and investor needs," Shumway wrote. "The right decision for all of us is to return investor capital."


In Depth

Virtu Celebrates Another Year Without a Single Day of Losses

Feb 26 2015 | 9:05am ET

High-frequency trading firm Virtu Financial Inc. reported another year without a...

Lifestyle

Hedge Fund Manager Out as Minnesota Wild Minority Owner

Feb 25 2015 | 2:45pm ET

New York hedge fund manager Philip Falcone is no longer a minority owner of the...

Guest Contributor

Risk: How To Get In Front Of The Problem

Feb 26 2015 | 9:53am ET

In considering the topic of risk in the hedge fund world, specifically, the oversight...

 

Editor's Note