A firm with roots to Steven Cohen’s SAC Capital Advisors is among the latest hedge funds reportedly shutting down.
Christopher Winham’s Tide Point Capital Management is closing “due to the majority owner’s personal wishes,” according to a report from Reuters. The firm declined to comment.
It is the latest setback for the so-called SAC PAC funds founded by former SAC employees. It is also one of three hedge funds reportedly closing in just the past week.
Izzy Englander’s Millennium Management has shut down Prediction Company, a statistical arbitrage hedge fund founded by physicists Doyne Farmer and Norm Packard in the early 1990s, according to Bloomberg. The firm, which at one point managed $4 billion, recently had less than $350 million, Bloomberg reported.
Millennium did not return a call seeking comment.
Also, Sentient Investment Management has told investors it plans to liquidate less than two years after launching in late 2016, according to Bloomberg. The market neutral fund, which managed less than $100 million, drew on artificial intelligence — and specifically machine learning — to trade equities.
The firm was up in 2017 but didn't make money this year, according to the report. Sentient did not return a call seeking comment.
It is not surprising to see small firms close down. After all, in the second quarter alone hedge fund firms managing less than $1 billion saw outflows of $880 million, according to HFR.
Until a few years ago, most inflows went to the largest firms, or those with more than $5 billion of assets. Altogether, hedge funds suffered roughly $3 billion in net redemptions in the second quarter, the first quarterly outflow since the first quarter of 2017, according to HFR.
Clearly the most interesting closure among the three is Tide Point, if for no other reason than its founder’s pedigree. The firm was headed by Christopher Winham, a senior research analyst at SAC Capital Advisors from 2002 to 2005. It was seeded by Tiger Cub Chris Shumway.
Tide Point posted double-digit gains in three of its first four full years from 2013 through 2016, according to a firm document acquired earlier by Institutional Investor. It was down 3.45 percent last year, after posting a 10.2 percent loss through September, according to a monthly report seen by II. The firm lost 2.29 percent this year through July, the monthly report shows.
Tide Point eschewed the kinds of stocks that have driven the market this year: tech, health care and financials, according to an investor.
The firm is not the only hedge fund with roots to Cohen to shut down.
As we earlier reported, last year Neil Chriss closed Hutchin Hill Capital, a multi-strategy firm, after suffering three disappointing years. Kingdom Ridge Capital, a small hedge fund co-founded in 2007 by Christopher Zepf, closed at the end of 2017 after 10 years of operation.
Meanwhile, Jason Karp’s Tourbillon Capital Partners lost 13.8 percent last year and 9 percent in 2016. It was down 1.4 percent this year through May.
Dorsal Capital Management, founded by former SAC technology experts Ryan Frick and Oliver Evans, is up 0.26 percent this year after posting low to mid-single digit gains in each of the two previous years.
