Wednesday, 23 July 2014
Last updated 10 hours ago
Jan 2 2014 | 12:32pm ET
As SAC Capital Advisors fades into its family-office future, one of the firm's former traders is staking a claim to its share of the legendary hedge fund's legacy.
Jason Karp's Tourbillon Capital soared 15% in the third quarter, according to ValueWalk. That's not far off SAC's return for the full year, of about 20%.
Karp launched the $350 million fund in January after a stint as co-chief investment officer of Carlson Capital. Karp was previously a trader and research director at SAC's CR Intrinsic Investors.
Karp's success in the third quarter was due primarily to his short bet against retailer J.C. Penney Co. Penney's shares dropped 47% in the third quarter, which saw its largest investor, Pershing Square Capital Management, dump its entire stake at a $500 million loss. Pershing Square chief William Ackman also resigned from Penney's board following a dispute with its chairman and interim CEO.
In a letter to investors, Tourbillon wrote that Ackman's exit was not due to a bout of frustration but to his fears that Penney's could fall further—an analysis Karp shares.
Tourbillon did suffer some losses on shorts in the third quarter, notably those on food staples names. But the firm said it was sticking with the bets, believing that the stocks are overvalued.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…