Atticus sees £2.7bn losses as downturn hits it hard
Atticus, the high-profile New York hedge fund involved in the failed Barclays bid for ABN-Amro, has lost more than $5bn (£2.8bn) this year after its funds were battered by steep falls in financial stocks.
The activist fund saw assets under management fall to around $14bn at the end of July, down from $20m last year – one of the biggest losses ever recorded by a hedge fund.
Most of the losses were caused by a 32.9 per cent drop in the $7bn Atticus European Fund – managed by former Goldman trader David Slager – and a 25 per cent drop in the Atticus Global Fund.
Atticus was hit by its high-risk event-driven strategy of taking large, concentrated bets on cheap stocks and predicting that a specific event would eventually cause them to rise. It rarely took short positions on a tumble to cushion its losses.
Like other event-driven funds, it has enjoyed huge returns in recent years, helping to net its founder Tim Barakett $675m.
But investors are looking to desert funds like Atticus in favour of those more geared towards a bear market.
Co-chaired by Nathaniel Rothschild, the son of investment banking giant Lord Jacob Rothschild, Atticus has been involved in a series of big-hitting deals.
It came to prominence last year when it secured a $1bn stake in Barclays and opposed its acquisition of Dutch bank ABN Amro which was eventually sold to a consortium led by Royal Bank of Scotland. It was also one of the few hedge funds that publicly opposed a take over of the London stock exchange by Deutsche Börse. The losses follow several bumper years for the firm’s funds, which had impressed investors with a solid performance. Atticus European recorded an annual average of 63 per cent in the last three years while Atticus Global has gained an annual average of 17.5 per cent.