Healthcare Hedge Fund Calls It Quits As Euro. Crisis Smolders

Jun 14 2012 | 12:40pm ET

Healthcare hedge fund Expo Capital Management will liquidate and return capital to investors due to the European debt crisis.

The five-year-old Los Angeles-based fund told investors last week that they should have their money back by the end of the month. Firm founder Paul Sinclair, who said he was “physically and mentally exhausted,” told them he’d rather close up shop than charge clients fees for holding their assets in cash. And with most of his own money tied up in the fund, he was no longer comfortable betting its assets on an uncertain market.

The $458 million stock fund has suffered losses over the past two years, losses that Sinclair blames on the difficult macroeconomic environment. An exasperated Sinclair told Bloomberg News, “I don’t have an edge on Greek elections, the Spanish banking system, what the European Central Bank, the International Monetary Fund, the Chinese government, Angela Merkel or the U.S. Federal Reserve will do.”

Expo is down about 6% this year after losing 8.7% last year—it’s first losing year. All told, the Expo Health Sciences Fund has returned about 50% since its launch in 2007.

In addition to Los Angeles-based Sinclair, formerly of Vantis Capital Management, Expo has a seven-member team based in San Francisco.

While Sinclair said he would take the summer off and perhaps begin a new hobby, he plans to keep his ear to the ground, continuing to follow the healthcare industry and particularly the U.S. Supreme Court case about President Barack Obama’s healthcare law.


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