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The Morning Brief: Dubin Steps Down from Highbridge; SAC Dumps Neways Stake

Another prominent hedge fund leader is stepping down. Glenn Dubin, who co-founded Highbridge Capital Management with childhood friend Henry Swieca, has stepped down from his role of chief executive officer and will no longer run the firm on a day-to-day basis. He is being replaced by Scott Kapnick, who joined Highbridge in 2007 to run Highbridge Principal Strategies, the firm’s global credit and private investment platform, which now manages more than $14 billion. Dubin will remain chairman.

“In no way am I leaving the firm, and in no way am I retiring or semiretiring,” he told the Wall Street Journal . “My day job has teeth….I’m going to go to the office every day, I’ve got a big bulk of my personal capital invested in Highbridge funds.” Meanwhile, Highbridge president Todd Builione is leaving the firm to join KKR, which wants to expand its hedge fund business.

Dubin and Swieca founded Highbridge in 1992 as a multi-strategy firm which an emphasis on convertible arbitrage. From the first day they thought about their succession plan, with neither of them pulling the trigger on individual trades. They sold a majority of the firm to J.P. Morgan Asset Management in 2004 and the rest of the firm in July 2009. At that time, Swieca severed all of his ties to Highbridge. Today, Highbridge and its affiliates manage about $29 billion, nearly quadruple the $7.4 billion Highbridge managed when JPMorgan took its initial stake. The $29 billion includes the $7.1 billion currently managed by Gávea Investimentos, the Brazilian hedge fund firm headed by Arminio Fraga, in which Highbridge bought a controlling stake in 2010. It also includes Highbridge’s private equity and credit business.


Steve Cohen’s SAC Capital Advisors is selling its 30 percent stake in Neways, a nutritional- and personal-care-products distributor, to private-equity firm Z Capital Partners. The embattled hedge fund firm is said to be taking a significant loss on the deal. SAC, which had lent money to Neways seven years ago, converted some of the debt to an ownership stake in January 2012.


Another hedge fund data collector has reported June results. SS&C GlobeOp Hedge Fund Performance Index’s gross return for June 2013 shows a 1.94 percent loss. In addition, hedge fund flows declined 1.30 percent in July. “Outflows exceeded inflows for the month, with capital activity mirroring prior quarter-ends and reflecting typical investor activity,” said Bill Stone, chairman and chief executive, SS&C Technologies, in a press release.

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