In a possible sign of the coming shakeout in the hedge fund industry, the Wharton Asian Equity-Linked Fund closed late last week. In 2002 the fund experienced poor performance of -15%. Vanessa Gibson, managing director of Wharton Asset Management says that the fund closed with over $50 million.
That is substantially down from its peak in 2001 when it stood at $235 million.
The fund was focused on convertible and risk arbitrage, and Gibson rose to prominence as one of the stars of the industry when the fund rocketed from very small beginnings in November 1997 to $235 million three years later. The respective departures of fund managers, Alistair Lloyd (to Lionheart) and Jonathan Brooke (to set up another fund) in 2000 and the end of 2001, may not have helped.
2002 was obviously not a good year, as was reflected by the fund's performance. But Gibson denied there were a wave of redemptions from fund-of-fund managers and said while there were some redemptions from the fund this was not the reason for closing the fund, but rather that it was seen as an opportune time to close.
Gibson says the closure was part of a strategic move to focus on locked-up money, and the closure was on the cards for some time. Last year Wharton Asset Management launched a fund with a three-year lock-up and it is in this area that Gibson says the company will focus now.