(Bloomberg) -- Pelorus Jack Capital, a long-short equity hedge fund started by an alum of John Burbank's Passport Capital, is shutting after about a year of trading, according to people with knowledge of the matter.
The firm raised almost $250 million when it started trading in April 2017, according to investor updates seen by Bloomberg. The Pelorus Jack Onshore Fund had lost 2.5 percent between April and November of last year, the updates show. Tim Garry, who founded the firm after about nine years at Passport, didn't immediately respond to an email seeking comment.
Garry told investors in a letter at the end of last year that the firm was shorting growth equities, particularly in the technology and health-care industries, and was holding onto value stocks. The firm was also betting on higher volatility, the letter shows, correctly predicting that “if volatility rises we are going to see a massive repricing in risk assets.” In February, the Cboe Volatility Index surged to 37.3 from 17.3 in just one day, with the S&P 500 Index tumbling to a three-month low days later.
Investors pulled about $6.6 billion from equity hedge funds in the first quarter of 2018, while the broader industry lured $1.1 billion, according to Hedge Fund Research. The stock-picking strategy gained 3.1 percent on an asset-weighted basis this year through May.
--With assistance from Hema Parmar.
To contact the reporter on this story: Katia Porzecanski in New York at kporzecansk1@bloomberg.net
To contact the editors responsible for this story: Margaret Collins at mcollins45@bloomberg.net, Vincent Bielski, Alan Mirabella
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