Trafalgar Asset Management – the prominent UK hedge fund run by outspoken investor Lee Robinson – is liquidating its flagship fund.
The $450m Trafalgar Catalyst Fund is being wound down as a result of “material” investor redemption requests, the Financial Times has learnt.
An investor in the fund told the FT that they were concerned about the apparent intention of Mr Robinson – who personally manages the fund and co-manages the firm alongside partner Theo Phanos – to establish a new venture separate from Trafalgar.
Mr Robinson has long been one of the London hedge fund community’s most high-profile managers – often dividing opinion thanks to his strident, bearish views.
Trafalgar is also one of a handful of top London hedge funds in which Goldman Sachs owns a significant stake through its Petershill vehicle – managed by Jonathan Sorrell, son of the WPP chief executive, Sir Martin Sorrell.
The liquidation of Catalyst is likely to have a significant impact on the value of Goldman’s stake.
The Catalyst fund traditionally specialised in investing in companies that were undergoing takeovers or restructurings but of late it has diversified with Mr Robinson’s interests to cover more macroeconomic themes.
At its peak, Trafalgar, which is based in London’s Baker Street, managed assets of more than $3bn and was one of only a handful of hedge funds successfully to navigate the financial crisis without suffering heavy losses.
The Catalyst fund rose 5 per cent in 2008 – the industry’s worst year on record, when peers, on average, lost 20 per cent.
Trafalgar currently manages assets of just over $1bn, according to a person familiar with its operations. Like many hedge funds, it suffered from heavy redemptions from cash-hungry investors in 2009.
Trafalgar’s Credit fund, which is run by Mr Phanos, and the firm’s Azri equity fund will continue operating, together managing just under $700m. It is not clear what Mr Robinson’s future position at the firm – of which he owns an estimated 40 per cent – will be.
Mr Robinson – who resides in Monaco for tax purposes – did not respond to a request for comment. Trafalgar declined to comment.
A letter sent to investors said that the Catalyst fund would be selling holdings as a result of redemption requests. One-tenth of the fund’s portfolio is held in illiquid investments which cannot be sold at the present time, the letter said.
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