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UPDATE 1-MOVES-Pine River partner Colin Teichholtz to leave hedge fund
October 11, 2017 / 7:31 PM / 5 days ago

UPDATE 1-MOVES-Pine River partner Colin Teichholtz to leave hedge fund

(Adds details about the firm’s real estate investment trusts)

By Svea Herbst-Bayliss and Lawrence Delevingne

NEW YORK, Oct 11 (Reuters) - Pine River Capital Management LP is losing another key investment executive just weeks after the hedge fund firm announced plans to shut down its main fund.

Pine River wrote to investors last week that Colin Teichholtz, a partner and fixed income expert who joined the firm in 2011, will be leaving this weekend, a person who saw Pine River’s letter to investors about the departure said.

A Pine River spokesman declined to comment and Teichholtz did not immediately respond to a request for comment.

The departure points to more upheaval at the Minnetonka, Minnesota-based firm, which has seen a number of senior executives leave in the last year as assets under management declined.

Pine River’s struggles underscore the difficulties faced by large hedge fund managers who have failed to produce market-beating returns. Perry Capital LLC, Eton Park Capital Management LP, Passport Capital LLC and Eclectica Asset Management LLP are among the major firms to recently close once-vaunted funds following years of mediocre performance and declining assets.

Teichholtz is a partner and co-portfolio manager of the Pine River Fund as well as head of Pine River Customized Investment Solutions, the firm’s website says.

In September, Pine River told investors it would shutter its Pine River Fund after clients continually pulled money out, shrinking its assets to $960 million when senior executives decided to liquidate it. The fund managed $2.99 billion in July 2016.

The Pine River Fund’s B1 share class gained 1.6 percent this year through September, according to a report by HSBC’s Alternative Investment Group. It produced an average annual return of 9 percent since May 2002.

The letter to investors regarding Teichholtz said the firm’s founder, Brian Taylor, and its co-chief investment officer, James Clark, would continue to manage the “wind-down” of the Pine River Fixed Income Fund and the Pine River Fund.

In the first months of 2017 partners Annette Krassner, who had been Pine River’s chief administrative officer since 2012, and Franklin Parlamis left. In 2016, the firm announced plans to close its Pine River Fixed Income Fund after Steve Kuhn, its co-portfolio manager, decided to step away from active fund management to concentrate on philanthropy.

Pine River managed about $8.5 billion as of Aug. 1, according to a U.S. Securities and Exchange Commission filing. That was down from $15 billion in 2015.

The firm, which made its reputation through savvy mortgage bond bets, has about $4 billion in so-called permanent capital through two real estate investment trusts: Two Harbors Investment Corp and Granite Point Mortgage Trust Inc . A number of investment firms have created similar structures as a way to diversify their business base during a difficult period for traditional hedge funds. (Reporting by Svea Herbst-Bayliss and Lawrence Delevingne; editing by Tom Brown and Jonathan Oatis)

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