November 19, 2007 / 9:08 PM / 11 years ago

UPDATE 1-Hedge fund Copper Arch to liquidate

(Recasts; adds background on fund and byline)

By Dane Hamilton

NEW YORK, Nov 19 (Reuters) - Copper Arch Capital LLC, a $1 billion hedge fund, is liquidating because its founder, former Morgan Stanley (MS.N) executive Scott Sipprelle, wants a “new challenge,” according to a letter sent to investors on Nov. 5.

Sipprelle, who agitated for the breakup of Morgan Stanley in 2005 under then-CEO Philip Purcell, said the firm is not liquidating because of poor returns. It said its long-term record for long-short equity investing has been “very good,” according to the letter.

“We have achieved multiyear compound returns far in excess of the market averages over a variety of challenging investing climates,” Sipprelle said in the letter.

Sipprelle said all funds in New York-based Copper Arch will be distributed to investors after Dec. 31.

Copper Arch declined to comment. The fund’s annual returns could not immediately be determined, but Sipprelle said they were not always above-market.

“Certainly there have been times (like the present petro-Google market) where we have looked hopelessly out-of-step,” he said.

Sipprelle, 44, did not say in the letter what he plans to do next. A source close to the matter said Sipprelle is not retiring but will take time off.

The fund’s dissolution comes as hedge and private equity funds struggle to become more institutionalized as key founders look to retire. For Sipprelle, “continuity, merely for the sake of continuity, is not a sufficient business purpose,” he said in the letter, a copy of which was obtained by Reuters.

“If the world divides between those who believe that a hedge fund should be like a Puccini opera - soaring, majestic and ultimately over - and those who believe a hedge fund should be more like a TV soap opera - emotional, dramatic and serially never-ending - I definitely reside with the former group,” said Sipprelle.

Sipprelle and partner Neil Barsky founded Midtown Research Group in 1998 with $18.4 million. The two split in 2002 and Sipprelle founded Copper Arch.

News of the liquidation was reported earlier on Opalesque.com, an industry Web site. (Reporting by Dane Hamilton; Editing by Tim Dobbyn) (Reuters email: dane.hamilton@reuters.com. 646 223 6161; Reuters messaging: dane.hamilton.reuters.com@reuters.net)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below