He might not’ve known it at the time, but hurricane-loving icthyophile Brian Hunter had started a trend. Blow up fund, start new one. Rinse and repeat. And Bo Collins, formerly with the now-defunct MotherRock is following in suit. Though it allegedly will not be turned into a hedge fund, Business Week’s Matthew Goldstein reports that Bo and several former MotherRock colleagues are starting a venture called 1618 Group, with tens of millions raised already from one investor. The group will be managing the generous (foolish, unwise, crazy) man’s money by “trading energy contracts and investing in energy-related private equity deals.”
Sadly, Collins does not share Hunter’s love of great food and fine wine, and choose not to name the Two Buck Chuck (though Franzia was apparently a strong contender). Bo (overconfidently?) picked 1618 in reference to the Greek “golden ratio” (1.6180339887). (De Divina Proportione claims the ratio’s application yields “pleasing, harmonious proportions” and psychologists believe that it factors in the humans’ perceptions of beauty. So if not a major money maker, Collins’s venture is sure to be sexy beast).
While we haven’t yet obtained any of 1618’s “private” documents, if they’re as “confidential” as Solengo, it’ll only be a matter of time. (We kid the Solengists).
Will Bo Collins’ Second Act Be Golden? [Business Week]
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- Use the Bloomberg command
NH BLG_DEALBREAKER <GO>
to access Dealbreaker
Did Solengo’s lawyers turn out to be a little bit sharper than you guys expected, or what?
suggested motto for your masthead:
“Dealbreaker.com – Biting Off More Than We Can Chew Since 2006
i heard dealbreaker won the case…
Bess,
Have you been under a rock? Hunter didn’t start shit. Closing down after blowing up – or even after having too high of a hurdle after a couple bad years is common practice in Hedgeland.
i think she was partially kidding, bsd, but nice try.
Oh, snap! You got her! Bess never, ever heard of funds blowing up. Not even when we’ve written about it here.
Sorry, Bess. I guess I just didn’t see the irony in “Brian Hunter had started a trend”.
she’s subtle.
I think we can all stop picking on Bess, she’s never lost $6.5 billion into the couch cushions.
An industry with unlimited upside and no penalty for failure. Yeah, those incentives won’t distort behavior! Now I have to go, so I can put on as ginormous a position I can get away with. Heads I win and tails… well, tails and some other chump hires me to manage his money on the theory that I’m a “risk-taker” who’s learned a valuable lesson on some other investor’s dime. This time it will be different!
Ben H, maybe you don’t fully understand how hedge funds are structured? HF managers closely align their interests with their clients’ interests. This is because the vast majority of a hedge fund manager’s net worth is invested into his own funds. And that is why you need to have a significant net worth before you can be a respectable hedge fund manager.
I fully understand that any smart investor will prefer to put his money in a fund where the principals commit their own money to the fund, but not every HF risk-taker is a) a partner/principal or b) invested in the hedge fund either in cash or deferred in size meaningful in relation to the potential rewards from payout. Brian Hunter was not a partner, for example, and was making ginormous bets one year into his tenure at Amaranth, at which point he didn’t have meaningful money in the fund.
The new firm is called the 1.618 Group The new firm is called the 1.618 Group
Business Week reported it as being called 1618: http://businessweek.com/bwdaily/dnflash/content/apr2007/db20070426_801760.htm?chan=top+news_top+news+index_businessweek+exclusives
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