BOSTON (Reuters) - Hedge fund Tide Point Capital Management is shutting down due to the majority owner’s personal wishes, the latest casualty in the $3 trillion industry which has faced increasing challenges in raising money and delivering top returns, two sources with knowledge of the move said on Wednesday.
A spokesman for the fund declined to comment.
Tide Point, based in Old Greenwich, Connecticut, was launched six years ago by hedge fund industry veteran Christopher Winham, who served as the fund’s chief investment officer and is its majority owner. Most recently the firm managed roughly $800 million in assets, one of the sources said.
Winham has been speaking with investors this week to relay his decision to shutter the fund which he said is purely personal and driven by a desire to spend more time with his family, the sources said.
After nearly 25 years on Wall Street, where he worked at Goldman Sachs and Steven A. Cohen’s hedge fund SAC Capital plus Diamondback Capital which was founded by SAC alumni, Winham told investors that the industry has changed dramatically over that time.
His fund invested largely in industrials, basic materials and consumer cyclicals, according to regulatory filings, with Jacobs Engineering Group Inc ranking as the firm’s biggest U.S. holding at the end of the second quarter.
Jacobs was a new position in the second quarter as was FMC Corp and Michael Kors Holdings Ltd. Winham also cut his bet on burrito chain Chipotle Mexican Grill Inc by 22 percent during the quarter. The restaurant chain has enjoyed a stock rally after hiring a new chief executive officer in February.
Over the last few years, small- and medium-sized funds have found it tougher to raise fresh capital and stay in business. Many investors have tired of hedge funds’ largely lackluster returns and high fees, moving money into less expensive index funds as the stock market marched higher over the last years.
The average global hedge fund returned 1.89 percent in the first eight months of the year, according to data from Morgan Stanley. By comparison, the S&P 500 Index rose nearly 8 percent during that period.
During the first three months of 2018, 145 hedge funds went out of business compared with 158 that opened up for business, data from Hedge Fund Research shows.
Reporting by Svea Herbst-Bayliss in Boston and Lawrence Delevingne in New York; Editing by Matthew Lewis