Investors Flee Balestra As Performance Suffers

Jul 22 2014 | 2:26pm ET

Hedge fund Balestra Capital Partners lost 14% in the first half—and that’s not even half of its problem.

The New York-based macro shop lost more than 60% of its assets to investor redemptions in the second quarter, The Wall Street Journal reports. The withdrawals totaled more than $600 million.

Balestra’s flagship hedge fund now manages less than $400 million, down from about $2 billion two years ago.

“We’ve had periods in our history where we understanding things going on, and see things happening and even make some good projections,” firm founder James Melcher told the Journal. “This is not one of those times.”

Balstra returned 200% in 2007 and nearly 50% in 2008. But the firm has struggled since then, a period of underperformance that Melcher called “unacceptable.”

Balestra has “made some changes,” including the departure of Melcher’s two partners last month. “It’s easier to make judgments in hindsight,” he said.


In Depth

FINtech Focus: Fundbase Aims To Revolutionize Access To Hedge Funds

Jan 23 2015 | 11:03am ET

Global investment in financial technology—also known as fintech—is booming....

Lifestyle

Ex-Hedge Fund Billionaire Won’t Run For Senate

Jan 23 2015 | 5:48am ET

Ex-hedge fund manager Tom Steyer will not run for Senate after Sen. Barbara Boxer...

Guest Contributor

From Switzerland With Love: Some Hard Truths About Central Banks And Risk

Jan 23 2015 | 7:54am ET

In the wake of the Swiss National Bank uncoupling the country’s currency from...

 

Editor's Note