Risk Manager To Board Pirate Ship

Oct 5 2006 | 2:49pm ET

Pirate ShipPirate Capital, which has hit its fair share of stormy seas in the past few weeks, with less-than stellar returns over the summer and a slew of departures, has hired a risk-manager to join its team. Mark Smith, who has run his own risk advisor consultancy for the past three years, it set to board the ship on Tuesday, where he will be tasked with enhancing the firm’s risk management systems, according to a source familiar with the matter.

Smith, founder and president of Mark Edward Advisors—which specializes in advising hedge funds on risk management—is putting his firm on mothballs in order to take the Pirate position, said the source. Smith’s experience includes stints at Basel Asset Management, Parker Global Strategies, SAC Capital Advisors and Chang Crowell Management.

In a recent interview with FINalternatives, Smith said he thinks that scandals like the huge loses at Amaranth are another black eye for the hedge fund industry, but may serve as a wake up call for managers.

“Scandals like Amaranth are going to make all the smart guys out there start thinking about putting in additional risk management systems,” he said. “The bottom 80% of managers just want to use risk management as a marketing tool, and there are many firms out there that aren’t mature enough to listen to their risk management people.”

Meanwhile, at Pirate, the story about the departures of five of the firm’s executives has been rewritten. Hudson is now saying that two analysts he reportedly fired had actually voluntarily resigned.

In a letter to investors last week, Hudson wrote, “Later on Wednesday, I asked for the resignations of two additional analysts, David Muccia and Matthew Goldfarb,” specifically separating that pair from the three other investment staffers that Hudson said left of their own volition. But late last Friday, Pirate released a statement from Hudson explaining, “I have now become aware that both had voluntarily and independently decided to resign from Pirate Capital and that their decision to resign was without impetus from me. The letter to investors was then apparently misinterpreted by some as saying that they had been fired by Pirate Capital. This was not the case as their resignations were entirely voluntary.”

In Depth

Financial Industry Blockchain Consortium R3 To Open-Source Platform Code

Oct 20 2016 | 9:03pm ET

Bitcoin's blockchain technology has spawned a flurry of activity among fintech startups...


Hedge Funds Swarm Into Palm Beach

Oct 27 2016 | 2:32pm ET

As the first flakes of snow fall on New York's northern suburbs, Dan Weil of South...

Guest Contributor

Hedge Fund Marketing – Tips for Your Initial Sales Meeting

Sep 29 2016 | 5:46pm ET

There are two main goals a hedge fund should have for an initial in-person sales...