Octavian To Close After Double-Digit Loss

Oct 11 2012 | 1:49pm ET

Octavian Advisors is closing its doors, with the activist hedge fund bemoaning the "exceptionally difficult" investment environment.

The $1 billion New York-based firm will end its six-year run sometime next year. The firm said it would conduct an orderly liquidation and asked investors to keep quiet to allow it to "monetize the fund's investments as smoothly and efficiently as possible." The ploy, obviously, didn't work, as the letter announcing the liquidation was leaked to Reuters.

Octavian founder Richard Hurowitz told clients that they'll get some of the their money back by the end of the year, but that most will come next year. The fund is down 11% this year through August, according to Reuters.

"While we have significantly outperformed the international equity markets we focus on over a multi-year period, we have not generated attractive absolute returns in an exceptionally difficult environment," Hurowitz wrote. "The last 18 months have been particularly difficult."

"We are deeply frustrated by a market that is driven almost entirely by macroeconomic and political decision-making in the short and immediate term, where idiosyncratic investments and analysis are overwhelmed by the broader backdrop, and where events have become more and more difficult to effectuate and analyze," he continued.

"We believe the world is currently presenting fantastic investment opportunities, but it is difficult to take advantage of them in a hedge-fund structure with monthly mark-to market benchmarking and quarterly liquidity."

Octavian's decision to pull the plug comes just a year after it opened a London office in hopes of taking advantage of the European debt crisis.


In Depth

Whisky Business: The Ultimate Liquid Alternative Investment

Sep 15 2014 | 7:02am ET

David Robertson knows his single-malt whisky—he was the Master Distiller at the...

Lifestyle

Hedgies Rock Out For Children's Charity

Sep 15 2014 | 8:40am ET

It's that time of year again—when hedgies trade in their spreadsheets for guitars...

Guest Contributor

Volkered: How Financial Sector Reforms are Creating Opportunities for Hedge Funds

Sep 16 2014 | 11:28am ET

New regulations have dramatically curtailed proprietary trading activity in investment...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

July/August 2014 Cover

In search of the ‘new normal’ at the Fed

The Federal Reserve keeps baby-stepping toward a “normalization” of monetary policy. But just what is normal?

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.