Sunday, 24 July 2016
Last updated 1 day ago
Oct 30 2012 | 9:10am ET
Geoff Grant, who survived the collapse of one hedge fund, is now closing another.
Grant, who co-founded Peloton Partners, the hedge fund that lost $3 billion in one week in 2008, has told investors he is winding down his follow-up venture, Grant Capital Partners.
In a letter to investors seen by the Financial Times, Grant said the $1 billion firm had no “edge” in current markets.
“This was a very difficult decision, but one I believe is in the best interests of all investors,” Grant, the chief investment officer, wrote to clients.
“The past two years have presented unique challenges in the macro space.”
An investor told the FT that Grant Capital's flagship Liquid Macro fund is down 6.2% year to date, having lost 1.7% last year (the fund remains up 7.39% since inception).
Peloton, which Grant founded with Ron Beller in 2005, posted huge losses in 2008 due to leveraged bets on U.S. mortgage-backed securities. A year later, Grant successfully raised money for his new California-based company.
“Interest rates around the world are at or close to zero and central banks have pledged to keep them there for the foreseeable future; foreign exchange markets are buffeted more by political than by economic events; and it seems unlikely this will change any time soon,” wrote Grant.
“There will be good opportunities over the next few years but I do not believe those opportunities will align with my skill set or allow me an edge in these markets.”