TPG-Axon Co-Founder's LionRock To Manage Only Partner Capital

Jul 26 2011 | 1:44pm ET

George Soros isn't the only hedge fund manager giving up outside capital.

LionRock Capital, the Asia-focused long/short hedge fund founded two years ago by TPG-Axon Capital Management co-founder Hari Kumar, is changing strategies and essentially becoming a family office. The move comes after two years of disappointing returns; LionRock's flagship fund is down 9% this year alone.

Kumar and LionRock co-founder Julian Snaith are abandoning that strategy, however, in favor of a "long-term fundamental investment style reflective of a family office or endowment model," Kumar told Bloomberg News in an e-mail.

"We decided that the best way to manage and compound our capital over a 10- to 20-year horizon was to create a concentrated portfolio with a long-term investing horizon," Kumar wrote. "Given that this style is different from a typical long/short equity hedge fund and since this style would not be in line with what the majority of potential investors would expect, we decided that we would focus solely on our capital."

It is unclear how much money Singapore-based LionRock raised from outside investors. Kumar and Snaith seeded it with US$75 million and Kumar said it will manage about US$100 million after the transition.

"We believe that we have enough critical mass with out capital to allow us to continue to run the fund with the appropriate research and operational infrastructure," Kumar explained.


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