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If the hedge fund industry were to have royalty, Louis Bacon, founder of Moore Capital Management, would be front and centre at court, jostling for the crown.
The 55-year-old trading Svengali is not only one of the longest-standing hedge fund managers, he is also one of the most successful.
Though certainly less high-profile, Mr Bacon comfortably ranks alongside George Soros and Paul Tudor Jones in terms of market-beating skill. He has made his investors a fortune since he first began to weave his way in and out of the world’s markets, speculating in commodities, interest rates, bonds and currencies, three decades ago.
But of late, by his own admission, returns have been “disappointing.”
So much so, that as he detailed in his latest letter to investors this week, Moore plans to hand back $2bn – a quarter of the flagship fund’s assets – in an attempt to resuscitate its moneymaking capabilities.
The move has huge significance. Mr Bacon is the highest profile figure in the industry to admit, albeit tacitly, that with hedge funds, it is not merely a question of being too big to fail, but also too big to succeed.
And although it is not the first time Mr Bacon has handed back cash, it is certainly the most notable. The hedge fund industry is no longer an innovative, entrepreneurial backwater of finance. Hedge funds now manage more than $2tn of money – most of it from pension funds.
By giving back $2bn, as some have noted, Mr Bacon is also giving back a guaranteed $60m in annual fees, at least, for his firm.
Little matter, perhaps, for a man whose estimated fortune stands comfortably over $1.5bn.
And in any case, as with many hedge fund managers, money is not necessarily his only motivation.
Moore Capital began life in 1987 as Remington Trading Partners, founded by Mr Bacon, a graduate in literature from Middlebury College in Vermont, after a half-decade stint trading futures on Wall Street.
In 1989, the firm was rebranded under its current designation – Mr Bacon’s middle name and that of his maternal family.
Mr Bacon, who is described as unshowy and down-to-earth by many peers, is certainly conscious of his ancestry.
Moore Global Investments, the firm’s maiden fund, was started with $25,000 of family money and in 2010, Mr Bacon bought back the historic family ranch: 8,500 acres of land in North Carolina, once owned by a distant relative.
Mr Bacon is in the process of returning the ranch to its antebellum-era glory as a rice plantation.
An anglophile, much of Mr Bacon’s time is spent in London, where Moore runs a large part of its operations. The firm’s UK arm emerged as a big donor to the Conservative party before the last election. To say Mr Bacon was a resident of any single city, would of course, be the kind of mistake made only by financial mortals.
Commensurate with his standing in the international hedge fund fraternity, Mr Bacon has homes and offices the world over. Apart from his plantation, Mr Bacon owns an island near the Hamptons, a palatial penthouse in New York and an estate in the Bahamas – understood to be for sale after a long-running feud with neighbouring fashion executive Peter Nygard. There was also a dead man discovered in the Bahamas estate’s jacuzzi in 2010.
With all the trappings of extreme financial success already secured, one big question of Mr Bacon remains: for how long will he go on managing money?
Some are tempted to see this latest return of cash to investors as the beginning of the end. And with a flurry of new regulations concerning hedge funds and trading around the world, life would certainly be easier for Mr Bacon if it was.