Eton Park a one time hedge fund giant is closing, according to a letter to investors dated March 23 a copy of which was obtained by ValueWalk.
The famous $7 billion hedge fund does not give a lengthy explanation of why it is shutting but notes that performance has lagged and that the market environment has changed significantly since the fund was founded in 2004.
In August, Mohnish Pabrai took part in Brown University's Value Investing Speaker Series, answering a series of questions from students. Q3 2021 hedge fund letters, conferences and more One of the topics he covered was the issue of finding cheap equities, a process the value investor has plenty of experience with. Cheap Stocks In the Read More
Eric Mindich the founder states in the letter in a manner reminiscent of other fund closings including Nevsky Capital:
When I founded Eton Park in 2004, I had a vision for a global, multi-disciplinary, team-oriented investment firm dedicated to delivering superior risk-adjusted 1,1105. Eton Park would invest across the globe in a wide variety of products, hire and retain outstanding people, and support all of this with world-class infrastructure and business organization. We have always pursued excellence everything we set out to do. This is what we said we would do from day one and we believe we have succeeded in accomplishing these goals over the years.
We understood then, as we do now, that our business model requires a significant degree of soak and scope for us to succeed in what is admittedly a broad ambition Recently, a combination of ind.try headwinds, a difficult market environment and, importantly, our own disappointing 2016 results hay challenged our ability to come to maintain the scale and scope we believe necessary to pursue our investment program consistent with our founding principles. As responsible stewards of your capital, we have been unwilling to comprise on the business model and investment program which you invested or the way in which we have pursued is As a result, we have made the very difficult decision to return your capital, from a position of relative strength.
The closure is likely one of the largest in recent times and the largest fund closure of the year.
In terms of next steps the letter states:
We anticipate returning 40% of all investors’ main portfolio balance by the end of April We believe we will be able to make substantial progress on the rest of the portfolio in the coming months, although certain investments, particularly Special Investments, will take longer.
DealBook which first reported the news of the closure notes:
One of the hedge fund’s best years came in 2013 when it returned 22 percent. In 2008, one of the worst years for hedge funds, Eton Park lost 10 percent, but that was far better than most other firms fared.
Eton Park had offices in London and Hong Kong as well. But a week ago, the firm quietly closed its London office, a sign of the trouble to come.