Bear Emerging Markets Fund Spins Off With $925M

Jul 15 2008 | 11:14am ET

Former Bear Stearns trader Melissa Ko has spun off her successful Emerging Markets Macro Fund, as new Bear owner JPMorgan Chase continues to shed hedge funds run by Bear Stearns Asset Management.

Ko’s new firm, Covepoint Capital, manages some $925 million, mostly from the Bear fund, it told investors yesterday. The firm became independent of JPMorgan in June, although under the spin-off agreement, JPMorgan is entitled to a unspecified portion of Covepoint’s revenue for five years. JPMorgan is not an investor in Ko’s new venture.

The EMM fund has enjoyed a run of recent success, posting returns in excess of 25% in each of the past three years, although it has slumped 5.14% this year. The fund once managed as much as $2.4 billion prior to the collapse of two other BSAM hedge funds, which led to some $600 million in outflows. Prior to the June spin-off, EMM managed $1.3 billion, but investors were given the chance to redeem their investments.

Ko had been planning the spin-off before Bear ran into trouble last year, Reuters reports.

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