Standard Pacific Capital to Close, Return Capital to Investors

Feb 4 2016 | 10:36pm ET

Long/short equity hedge fund manager Standard Pacific Capital is shutting down. 

The fund will liquidate its remaining positions and return outside capital, according to a Reuters article citing a letter sent to investors. The fund’s founders, Doug Dillard and Raj Venkatesan, will revert to a family office-type structure to manage their own money.

"After 21 rewarding years, Standard Pacific Capital has decided to return capital to investors across all of our strategies," the letter reportedly said. "It has recently become clear to both of us that sometimes there is a logical conclusion to even a good thing. We decided that now is that time for Standard Pacific."

Standard Pacific becomes the latest well-known fund to close amid an extraordinary environment of volatility, fears of slowing Chinese growth, crashing energy prices and below-zero benchmark bond yields that has sent much of the traditional investment management playbook out the window.  

Based in San Francisco, Standard Pacific was founded in 1995 and managed more than $5 billion at its peak in 2004. Current AUM is $300-$400 million, according to Reuters, and the fund’s most recent 13F showed approximately $100 million invested across 25 long positions. The firm also reportedly consults on several hundred million dollars in assets for third parties. 

Standard Pacific's decision is noteworthy as the firm’s performance since inception was relatively strong. It booked annualized returns in its main fund of more than 9% since 1995 and gained 4% last year, according to the letter, both of which were ahead of comparable alternative asset benchmarks. It also gained in 2008, Reuters noted, a year when most hedge fund performance went deeply negative. 

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