WEST PALM BEACH, FL (HEDGECO.NET) – Saranac Capital Management is to close after less than 18 months in business. The hedge fund started with $2.9 billion under management in December of 2004, butunimpressive performance saw investors withdraw their investments over the following months.
The hedge fund was managed by former Citigroup trader Ross Margolies. At Citigroup, he ran about $3.25 billion in hedge funds and managed the $1.6 billion Salomon Brothers Capital Fund to 18 percent annual. In this hedge fund however, the broad-based collapse in Saranac’s complicated strategies caused Margolies to close the fund because the fees generated were not enough to pay his 45-person staff. The remaining $600 million of the original capital still under Saranac’s management will now be returned to investors.
As Saranac launched its first trades in the winter of 2005, convertible and equity-arbitrage strategies began a nearly year-long decline. Saranac’s closing shows that even fund managers with solid track records and access to billions in capital are under pressure to deliver profits.
The closure comes comes amid increased competition, but some also see it as a warning to hedge fund investors, who have been attracted in the past by high-profile fund managers promising huge returns on their money.
Alex Akesson
Contributing Writer
HedgeCo.Net
Email: Editor@hedgeco.net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
Be sure to check out our sister sites. www.hedgefundlounge.com, www.hedgefundtools.com, and www.hedgefundemployment.com.
