U.S. Markets

Hedge fund Taylor Woods transforming into Madava Asset Management

BOSTON (Reuters) - Hedge fund manager Beau Taylor, who was originally backed by the Blackstone Group, and private equity investor Robb Turner are forming Madava Asset Management LLC, a new firm that will focus on energy investments.

Trevor Woods, who has worked with Taylor since co-founding the hedge fund Taylor Woods in February 2011, is not joining the new firm, Taylor wrote in a letter seen by Reuters. Woods is leaving to pursue a new career endeavor, the letter said.

“Robb and I will serve as Co-Managing Members of Madava, and we will jointly lead the new firm,” Taylor wrote, adding: “We all agreed it made sense for Trevor to transition out of the firm partnership at this time and have Robb purchase his equity.”

The U.S. oil industry is slowly recovering from a two-year price war with OPEC member nations and natural gas is increasingly popular for power generation and home heating.

At the same time, the cost to produce wind and solar power continues to plummet, fueling widespread interest in alternative fuels from consumers across the economic spectrum.

In 2001, Turner co-founded private equity firm ArcLight Capital. He sold his stake in January to Goldman Sachs Asset Management’s Petershill program and Wafra Investment Advisory Group, in part because he wanted to pursue energy investments in the public markets.

The hedge fund that Taylor and Woods founded with seed capital from Blackstone Group made headlines with a bearish bet on natural gas in 2015 which earned its investors an 18 percent return during a year when most hedge funds lost money.

However, 2016 was tougher and the hedge fund lost 14 percent, ending the year with roughly $800 million in assets.

Since its launch, Taylor Woods returned an average 3.4 percent a year, beating its benchmark S&P GSCI Total Return Index, which lost 12 percent during the same time.

The letter said that the Taylor Woods Fund is being transformed into the Madava Energy Commodity Fund.

Reporting by Svea Herbst-Bayliss; Editing by Alan Crosby