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

GSAM's Papagiannis: Liquid Alternatives For The Long Run

Apr 21 2017 | 8:44pm ET

Interest in liquid alternatives cooled a bit last year amid a broad shift in investor...

Lifestyle

Aston Martin Returns To Debt Market As DB11 Drives Turnaround

Mar 31 2017 | 5:21pm ET

James Bond’s preferred carmaker is returning to the public debt markets for the...

Guest Contributor

Debunking Conventional Investment Wisdom (Part II)

Apr 17 2017 | 5:56pm ET

The alternative investment industry is currently replete with buzzwords around data...