Wednesday, 22 October 2014
Last updated 15 min ago
Apr 17 2013 | 2:03pm ET
A bond hedge fund led by three Brevan Howard Capital Management veterans will close its doors after suffering redemptions.
5:15 Capital Management has seen its assets under management fall from $1 billion early last year to just $370 million at the beginning of the month, co-founders E.G. Fisher and Rob Wahl wrote to clients yesterday. The Greenwich, Conn.-based firm invested in sovereign debt.
Fisher and Wahl wrote that the fund will wind down and return capital to clients. The two blamed "sector rotation" and "weakness in the fund of fund industry" for the redemptions, and concluded that 5:15 could not continue at its reduced size.
"We did explore restructuring the firm to manage a reduced AUM level," Fisher and Wahl wrote in a letter obtained by Bloomberg News. "We came to the conclusion that because our trading-oriented strategy requires a significant and robust platform to meet our high standards for institutional-quality risk management, execution, operational control and regulatory compliance, it is in our investors' best interest to wind down the fund."
5:15, named for a song by The Who, has enjoyed annualized returns of 5.5% since its debut. It is down 0.4% this year, which will be its first and only losing year.
Fisher, Wahl and Morrie Sachs launched 5:15 in July 2009 to invest in government debt from the world's seven largest economies. The firm's name comes from The Who's rock opera Quadrophenia. The song recounts the opera's protagonist's trip to the beachside city of Brighton on the 5:15 train.
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